A HISTORICAL ACCOUNT OF INDUSTRIALIZATION IN INDIA AND IN KERALA

2.0 Introduction
By way of substantiating the thesis that the large scale
industries and their promotion have proved detrimental to
environment, a close look at the history and evolution of
industrialization is a must. But such a historical account of
industrialization is too vast a field for the researcher to look
into. It is therefore necessary to limit this enquiry
to the area of industrialization in India in general and to
industrialization in Kerala in particular.
What were the kinds of industries that were flourishing in
India before the advent of the British? What was the impact of
the industrial policy of the British on the traditional
industries and the extent of industrialization in the
independent India? How did this evolution of large scale
industries affect the existing small scale industries? What is
the history of industrialization in Kerala? What are the
industrial promotional agencies that are at work today? These
are some of the questions that await an answer in this chapter.
The answer that might emerge from the historical account of
industrialization in India and in Kerala will be briefly
enumerated at the end of this chapter.
2.1 Industrialization in India
Industrialization in India can well be marked under two
heads viz., Pre-British Period and the Evolution of Modern
Industry.
2.1.1 Pre-British period
India was famous for her handicrafts right from Pre-
British times. During the Mughal Period, India had a considerable
variety of arts and handicrafts. In several handicrafts,
specialization of jobs had advanced to such an extent that
particular classes of artisans undertook distinct processes in
the class of production; and the products commanded wide range of
foreign markets. At that time no other country produced products
that could be imported to India in exchange for cotton and silk
goods which were in world-wide demand. Europe had to pay in
bullions for the increasing volume of Indian exports.
"At that time when the west of Europe, a birth place of
modern industrial system, was j-nhabitated by
uncivilized tribes, India was famous for the wealth of
her rulers and for the high artistic skill of her
craftsmen. And, even at a much later period, when the
merchant adventurers from the West made their first
appearance in India, industrial advancement of this
country was, at any rate, not inferior to those of the
more advanced European nations. "
India was also famous for jewellery of exquisite quality
which were made out of gold and silver and also those which were
made out of copper, brass and bell-metal. Many urban centres
were famous in those days for carving work in ivory, wood, stone
and marble. In bigger towns each handicraft was organized into
a guild which safeguarded the professional interest of its
members.
Though the quality of Indian goods was high, in England
they were treated as 'plague' shortly. Prohibitory laws were
passed in 1701 and 1720 against the use of printed Indian calicos
in England in the interests of the woolen and silk industry of
that country. So the supremacy of Indian handicrafts could no
longer be maintained because of certain technological, economic
and political developments. 2
One of the important reasons for the decline of indigenous
industries was the industrial revolution of England. The cotton
industry was the first to be revolutionalised by the new process.
India was reduced to the status of a colonial dependency.
Imperialism set out to destroy the independent economy and a
substantial part of native handicrafts. Prohibitory duties were
imposed on Indian goods because, up to 1813 the silk and cotton
goods of India were sold in the British market at a price from
fifty to sixty percent lower than the price of those fabricated
in England. The 'Gumasthasr, the agents of the East India
Company were entrusted with powers which they frequently misused.
This high-handedness of the company agents contributed to the
decline of Indian goods. A number of other reasons contributed
to this but they are not immediately relevant to this thesis and
are therefore bypassed. By 1880, the decline of handicrafts were
nearly complete and the mass of Indian handicrafts men had no
alternative means of livelihood.
2.1.2 Evolution of Hodern Industry
The emergence of modern industrial enterprises can be
traced back to the end of the 18th century, though it developed
after 1850. The new industrial activity took two forms,
plantations and factory industries. Real and satisfactory
progress in the factory industries was began only after 1875.
During the next two decades, two textile units - cotton and jute-
flourished. Mr. Justice Ranade, studying the position of
industries during this period observed,
"It was, however, only after late nineties that
industrial progress all over the country began; and in
the first decade of the twentieth century many mineral
industries and some small miscellaneous industries came
into prominence. It was also during these later years
that there spread in India, the use of small machines
and small engines, and also there was generally a
tendency to make a great y increased use of mechanical
appliances everywhere." 4
From the analysis of the factors contributed one may
realize that the gradual transformation of India into a single
national unit and the growth of great mercantile centres were
the impacts of British rule. The introduction of the English
language was another factor which helped the training of a large
number of young Indians. This was necessary for mastering modern
scientific subjects which were necessary for gaining the
technical knowledge required for industri.es and also in business
organizations and management on Western 1.ines. The abolition of
the monopoly of the East India Company in 1833 provided a big
opportunity for the English merchants to develop trade and
industry in India. Foreign capital and enterprise flowed into
plantations and monopolistic industries such as jute and
railways. The foundation for the development of large scale
industries was thus laid. The improvement of oceanic and inland
transport system contributed to this. Another major factor which
contributed to this was the political developments in India and
abroad. For instance, the American civil war gave a great
impetus t.o the cotton industry and the World War I to the iron
and steel industry. But it is observed that the development of
industries in India was slow. Dr. S.C. Kuchhal observes,
"...development of industries in India was not only
slow but also lop-sided in its character. The results
of industries up to world war I were disappointing.
With abundant supplies of raw materials, with a
redundant population ... with an excellent market within
her own boarder, India after a century was supportin
only about 2 % of her population by factory industry." 9
The Uorld War I (1914-t18) (which was fought on a global
basisland the years immediately following the war experienced a
sort of industrial boom. The crisis of 1921, the widely
fluctuating exchange rates of 1921 to '27, the depression of
1929-'33, the recovery of 1934-'37, the adoption of constitution
in 1935 and the formation of Ministries in various provinces
during 1937-'39 were some of the main events that influenced
India's industrial development during the inter-war period.
It was during this period that ~pdian Industrial
Commission 1 9 1 6 - 1 8 the Fiscal Commission (1921-'22), the
External Capital Committee (1925), the Rota1 Whitley Commission
and Labour (1929-'31) and Central Bank:ing Enquiry Committee
(1940) were appointed to make a deep enquiry into their
respective fields. This directly or indirectly helped the
development of Indian industries.
India registered a substantial progress in various
industrial fields during 1922 and 1939. Considerable progress
was recorded in industrial production and the total number of
factories increased from 2936 in 1914 to 11,613 in 1939 and
the number of workers engaged in them increased from 9,50,000
lakhs to 17,50,000 lakhs.
5
During the Second World War period, though the actual war
was not fought on Indian soil as such, India stood as a major
supply base of war materials for the Middle Eastern and South
Eastern theatres of war. But the capacity for the production of
war materials in India was limited. Therefore, a few new
industrial enterprises were set up.
Thus, some new important industries started production
during the war period. These include manufacture of transport
equipment, chemicals, metals and mechanical industries like
diesel engine and pumps. There was considerable increase in the
number of new industries. The number of companies in 1945 rose
to 14,859 with total paid up capital of Ks. 290 crores in 1939.
This shows that the number of companies increased by 3475 and
paid up capital by nearly Rs. 100 crores.
6
Along with the increase in the number of industries, the
War also had some adverse impact on the Indian industrial
economy. There arose a continuous deterioration of plant and
machinery due to optimum and over work and there was no proper
repairs. The authorities were bothered only about the immediate
need of war time. So, long term factors such as location,
availability of raw materials, scale of operation, size of market
and sufficiency of technical and financial organizations did not
receive due attention. The war created inflationary pressure on
Indian economy. The high cost of production and improvised
methods left a legacy of inflation which lasted for long. The
war time diversion of the country's resources for defence
purposes led to an acute scarcity of various consumer goods and
articles essential for manufacturing purposes. This problem was
further strengthened by large scale currency expansion and thus
the prices went on increasing.
During the immediate post war years, the industrial
production was low and stagnant. Almost all industries
registered lower output and the situation was serious with
respect to cotton, textiles, cement, iron and steel, sugar and
paper.
1947 marked a serious threat to the nation as such, so
also to the industrial activities. The partition of India
brought about a complete disruption of the industrial and
economic system, which had for long, lived as a single united
economic unit. Partition, no doubt, influenced adversely the
pace and pattern of industrial development of India in subsequent
years. Industrial production continued to be hampered by the
lack of confidence among the industrialists. With the aim of
uplifting the disrupted Indian economy, several steps were taken.
In 1948, industrial production in almost all industries showed a
definite improvement over the previous year except two
industries i.e., coal and steel. This is said to be mainly due
to the shortage of raw materials, lack of incentives among
industrialists, and so on.
The Employees State Insurance Corporation was formed on
1948 by the Government to improve labour welfare. The Coal Mines
Provident Fund and Bonus Scheme Act 1948 c!ame into operation for
the payment of bonus. The Indian Factories Act of 1949 laid down
the minimum requirements regarding health safety and general
welfare of workers. It was on 7th April 1948 that the Resolution
on Industrial Policy was adopted by the Government, laying down
the broad objectives of Government's policy in this field, and
demarcating the respective spheres for private and public
sectors. In the years that followed also it~dustrial production
was quite good. 7
A new feature of the year was the starting of new
industries for the manufacture of autolnatic looms, aluminum
powder, etc. Among the consumer good industry, the production of
cotton cloth and yarn rose by about 11 percent over the previous
year. In september 1951, the State Financial Corporation Act
was passed to enable State Governments to set up their own
Industrial Financial Corporation to assist: medium and small scale
industries. In September 1951, Parliament also passed the
Tariff Commission Act to enquire into the claim for protection of
Indian industries by establishing a Statutory Tariff Commission
and in October 1952 the Industries (Development and Regulation)
Act was passed for regulating industries as a corollary to
planned development. For further improvement in July 1961, a
Joint Consultive Board on Industry and Labour was set up to deal
with the question relating to nationalisation and related
problems.
2.1.3 Industrial Policy Evolution
In 1609, when the East India Company came to India, they
were interested in the export of manufactured products of India.
So they encouraged Indian crafts industry; but with the
industrial revolution in England after 1750, the English were
antagonistic to the above trading policy as the Indian products
started dominating England. So the policy of England was to
export the raw materials to England instead of the finished
Indian industrial products. In 1858, when the responsibility of
Indian administration was transferred from the East India Company
to the British Crown and to the Parliament in England they
adopted the policy of '~aissez-Faire' (The policy of non-
interference by the State in the economic affairs of the people).
Therefore in India also the British rulers assumed
disinterestedness when the Indian handicrafts started rapidly
declining. Thus the policy of Laissez-Faire remained the running
philosophy, though it was more of a dogma than a complete fact.
Madras Government was the first to make some Serious
efforts (1890) in the direction of improving technical education,
surveying industrial potentialities, assisting private industrial
enterprise and even starting some pioneering industrial units in
the province of Madras on the basis of available industrial
resources there. This appears to be the beginning of the
reversal of the policy of Laissez-Faire :in the industrial sphere
of India by the British rulers. In 1905, Lord Curson established
a separate imperial department of commerce and industry.
In Bengal, a Superintendent of industries and an Inspector
of technical and industrial institutions were appointed. In the
Central Province, attempts were made to revive cottage industries
such as weaving and shoe making. In the Madras province, a
separate provincial department of industries was established in
1906. But the Secretary of State disapproved the above activity
of the State, directly helping industrial development in the
provinces and in the country.
It was during the period of the First World War that the
need for a new industrial policy was urgently felt and the result
was the appointment of Industrial Commission in 1916. The Indian
Munitions Board was appointed in 1917 to control and develop
India's resources, especially with a view to meet the needs of
the war. The Industrial Commission which submitted its report in
1918 states:
I ) in future, Government must play an active part
in the industrial development of the country, with the
aim of making India more self-contained in respect of
men and material, and (11) that it is impossible for
the Government of India to undertake that part unless
provided with administrative equipment and f rearmed
with reliable scientific and technical advice." 8
The Montagu-Chelmsford report on constitutional reform of
1919 also pleaded for the industrial development of the country.
It states that on all grounds a forward policy in industrial
development is urgently called for not merely to give India
economic stability but in order to satisfy the aspirations of the
people. lo Under the Montagu-Chelmsf ord ref o m s industries became
provincial transferred subject. M t e r the First World War, there
was an increasing pressure and demand for some concrete action on
the part of the Government of India to assist and protect
industries and as a consequence to this Indian Fiscal Commission
was appointed.'' The recommendations of the Fiscal Commission
were accepted and a Tariff Board was appointed in 1923. On the
recommendations of this, the Government of India granted
protection to a number of industries such as iron, steel, cotton,
textiles, sugar, matches, etc.
Meanwhile, in 1922 State Aid to Industries Act was passed
in Bombay and subsequently similar Acts were passed in Bihar,
West Bengal and Madhya Pradesh. The Provincial Governments took
several measures to assist industries, particularly small scale
and cottage industries in the form of financial assistance.
Under the 1935 Act also industry was a provincial subject unless
otherwise specified. It is also found that the Indian
Nationalist Movement had accepted industrialization as necessary
to the development of India. In 1937, the Congress Working
Committee passed a resolution which called upon the Congress
Ministers that had taken office in the province to appoint a
committee of experts to consider the urgent and vital problems,
the solution of which is necessary to any scheme of national
reconstruction and social planning.12 The Industries Ministers'
conference held in October 1938 was of the opinion that the
problem of poverty and unemployment, of national defence and
economic regeneration can not be solved without
industrialization.
A conference of Ministers was called and it was this
conference which was responsible for the creation of Congress
National Planning Committee. The conference gave importance to
the views of various Provincial Governments and it was decided
that large scale industries are necessary on all India basis and
that all Provinces and Indian States should make effort to
fulfill this aim. l3 A committee was constituted under the
Chairmanship of Jawaharlal Nehru and K.T. Shaw as the Secretary.
The conflicts between large scale and small scale industries were
very prominent in its meetings. A compromise was reached when
the Chairman argued that there can be no planning if such
planning does not include big industries. But the Secretary
argued that the basic Congress Policy of encouraging cottage
industries must be taken into account in formulating plans.
14
In 1948 Government announced its industrial policy which
envisaged mixed economy for India. The industrial policy
recommendation recognized the need for the expansion of
production as the pre-requisite for more equitable
distribution. l5 After the adoption of the constitution and the
socio-economic goals the industrial policy was comprehensively
revised.
It was in 1956 that the industrial policy was reviewed.
The after-effects of the Second World War and the communal
disharmony were the factors that had made the situation abnormal
and this called for the review of the industrial policy.16 The
major objective was to speed up the rate of economic development
of heavy and basic industries. Private sector was considered as
significant as the public sector. In this the role of the State
industrial sphere was broadened. Hence the 1956 industrial
policy resolution gave primacy to the role of the State to
assume a predominant and direct responsibility for industrial
development. 17. 17A
In 1977 when the Janata Government came into power they
announced a new industrial policy. Their main emphasis was on
the employment generation arid it was recognized that this was
possible only by the speedy development of small scale,Khadi and
village industries. l8 Special attention was given to laid upon
small scale sector. The policy also called for an agency called
district industry centre.
In 1980, the industrial policy was reviewed by the new
Government and this policy 1.ays emphasis on the relative growth
of different sectors, large, small and tiny. Modernization was
considered necessary for small and tiny sectors. The policy gave
all encouragements to export oriented industries and for
encouraging foreign investment in high technology areas. 19
The industrial policy of 1980 was revised by the
industrial policy of 1991. The major objectives of the new
industrial policy (now in existence) are to build on the
infrastructure already made; to correct the distortions that may
have crept in, maintain a sustainable growth in productivity and
to provide gainful employment and to attain international
competitiveness. The pursuit of these objectives will be
tampered by the need to preserve the environment and ensure the
efficient use of available resources.
20
2.1.4 Plan Wise Industrial Investment and Growth
of the Public Enterprise
The industrial investment through successive Plans is
provided in the Table 2.1. What has been revealed in the table
Table 2.1:
India: Industry and Hinerals - Public Sector Outlay
PlanlPeriod Plan Provision (PP) Actual Outlay ( AO) % of t ot al Expenditure "a0 t o PP
Industry & Villaqe & Industry & Villaqe & Industry & Village & Industry & Village &
Minerals Small Ind. Hinerals Srnall Ind. Minerals Small Ind. Hinerals Small Ind.
I1P 1978-80 2,384 256 19.51
VII 1985-90 19,663 2,753 25,971 3,249 11.5 1.5 132 118
VIII 1992-97 40,588 6,334 ..
-. .. ..
* Including other industries expenditure 212 cmres
Source: 1. Government of India, Planning Cmi ssi on, Fourth Five Year plan 1964.74, New Delhi, 1910
2 , - -. . -. . -. -. . - - - ... . - -. - -. - - - .. - . . - . . . . . - , Eighth Five Yea Plan 1992-97, New Delhi.
3.
Ministry of Industry, Snall Scale Industries Development
Cmi s s i on 1989, New Delhi,l990.
4, ..-.-....-.-..-.-. ........-..-.---... Dept, of Industrial Developnent
Handbook of Industrjal St at i st i cs, New Delhi, 1989.
5. Govt. of India, Ministry of Information and Br ~~dcas t i nq, Publication Division,
India a Reference Annual [Various Years].
6. CUE, Msi c 3;;r;is;ics Relating t c Ii~dihn Z~wil'my, Ayust, 1954.
Table 2.2: INDIA: Plan Wise Growth of mrblic Enterprises &
Investment
Statement Number of Total investment
enterprises (Rs. in crores)
At the commencement of the :Lst
five year Plan (1 April 1951) 5
At the commencement of the 2nd
five year Plan (1 April 1956) 21
At the commencement of the 3rd
five year Plan (1 April 1961) 47
At the end of the 3rd five
year Plan (31 march 1966) 73
At the commencement of the 4th
five year Plan (1 April 1969) 84
At the cammencement of the !5th
five year Plan (1 April 1974) 122
At the end of 5th five year
Plan (31 March 1979) 169
At the commencement of the 6th
five year Plan (1 April 1980) 179
At the commencement of the '7th
five year Plan (1 April 1985) 215
At the end of the 7th five year
Plan (31 March 1990) 244
As on 31 March 1991 246 1,13,896
As on 31. March 1992 246 1,35,871
Source : Government of India, Ministry of Information and
Broadcasting, Publication Division, India 1993:
A Referecne Annual, New Delhi, 1994, p. 508.
is that the investment made for large industries and minerals was
increasing in every Five Year Plans and it is many times greater
than that of village and small scale industries. This also can
be claimed as one of the reasons for the deterioration of the
status of village and small scale industries. The thrust was
always on the development of large scale industries through the
Five Year Plans. Table 2.2 shows the Plan wise growth of public
enterprise in India and their investment. A steady increase in
the number of public enterprises can be noticed from 1951 to
1990. In between 1990 and 1991 only two enterprises were
established, and there was no new enterprise started in between
1991 and 1992 even though the investment was increased by about
200 crores. This may be utilized for maintenance or modification
of the existing area.
2.2 Industrialization in Kerala
It appears that several factors contribute to the
industrial growth of a country. The resources of the region and
the labour force are the basic factors which contribute to it.
The initial industrial base of that particular region plays a
crucial role in the further development of that country.
Therefore we pass on from the examination of industrialization in
India to industrialization in Kerala.
As far as Kerala is concerned, from centuries back
traditional industries like mat weaving, handlooms, bamboo
products, etc. were popular in different parts of the State. It
was only on 1st November 1956 that Kerala was formed by the
unification of Travancore, Cochin and Malabar, which were three
distinct political units. Travancore and Cochin were under
princely rule, while Malabar was part of adjoining presidency
and was under British rule.
It was very fortunate for Travancore and Cochin that they
were never under the domination of a foreign rule. The relation
between the two Governments and the British was very cordial and
that helped both the Governments to industrialize their States.
2.2.1 Industrial Development in Ravancore
Among the three political units, Travancore registered
considerable progress in the field of industrialization. This
may be due to the importance given by the rulers for
industrializing their State. In this context it is interesting
to recall that Travancore was the first State to nationalize
trade in commercial crops in 1750 AD, under the rule of Maharaja
Marthanda Varma. But after a hundred years, the trade was
denationalized.
The industries of Travancore can be classified into two
sub divisions: (i) Factory industries (ii) Cottage industries.
Factory industries were only gradually coming to prominence.
Their number was increasing every year as would be evidenced by
the speedy rise in the number of factories in the annual
statistics. Out of the 159 factories established then. 77 were
engaged in the manufacture of tea and one in curing cardamom.
The remaining 81 were engaged in the manufacture of tiles, coir
yarn, matting, rubber, paper, steel goods and sugar, matches,
etc. Among these, the extraction of coconut oil and manufacture
of coir yarn arrested greater attention. There were numerous
cottage industries spread throughout the State.
"Various cottage industries have for centuries obtained
a firm foot hold in the country and cotton weaving and
coir making, wood and ivory carving, screwpine work and
carpentary are well known for their artistic excellence
throughout the world. . . @12'
Handloom weaving was the most important cottage industry
in vogue. Cotton weaving was quite prevalent throughout the
State, particularly in South Travancore. Manufacture of silver
and gold threads, lace and embroidery, bell-metal industries,
iron industries, screw-pine, mat-weaving, wool-seasoning palm-
leaf umbrella making, preparing coconut jaggery, etc. were the
major cottage industries.
The first industry in the State of Travancore was a
textile mill at Quilon, established by an American in 1881. This
was followed by the establishment of the first coir factory at
Alleppey . 23 In 1883 an indigo factory was started by a Dutch
family at Kulachal, Northern part of Travancore. Salt
manufacturing industries were established in Trivandrum,
Karunagappally and Karthikappally. The match factory at Thenmala
was also an important business establishment. 24
It was in 1884 that the Quilon Spinning Mill started under
a European management. It worked for about 20 years and with the
outbreak of First World War it ceased working. The Punalur paper
mill in Quilon District was started in 1887. At that time
electricity was not available and water power was used to run the
paper plant.25 In the 19th century itself handweaving units vere
established at Kottar, Balaramapuram, Chirayinkil and Pandalam.
According to the 1931 census, there was about 15.18 of
the people engaged in different types of industries. The
proportion was only 10% as far as India as a whole was concerned
(See Table 2.3).
Table 2.3: Wavancore: People Depended on Industries
Year No. of employees depended Percentage of total
on industries population
Source : T.K. Velu Pillai, havancore State Hanual, Vol. 111,
p.41.
In the early years, private enterprises vere not
forthcoming in adequate measures to take up the challenging tasks
of industrialization. So the Government was obliged to take up
this task. The ruling houses both of T'ravancore and Cochin took
effective measures to create socio-economic overheads and to
promote the development of indigenous entrepreneurship.
The beginning of an attempt to oryanize industries in the
State dates back to the year 1918. In that year, a separate
department for industries was started by the Travancore State
Government. During 1920-21 an Economic Development Board was
constituted with the objective of developing the economic
resources of the State, establishing new industries and expanding
old ones. The industrial pattern in the State at that time was
mostly confined to the coir yarn spinning, handloom weaving, and
such other cottage industries. Though there were some registered
factories, most of the industries were in unorganised sector.
With the organization of Industries Department in
Travancore under Dr. S. Backer, the industrial climate changed.
Many new schemes were taken up and encouraged by Economic
Development Board. The result was that a good number of the
existing large scale industries came up in the subsequent years.
A sugar factory was started in Thuckala (now in Tamil Nadu) in
1931-32.27 It worked for about 12 to 13 years and later closed
down with the coming up of a bigger unit at Thiruvalla.
Industrialization and C.P. Ranamvary Iyer
Industrialization of the former Princely State of
Travancore began much earlier than in most other regions in
India. Efforts were made since the middle of 19th century. The
process of integration of Travancorean economy with the
international commodity market commenced from around the second
half of the 19th century. The basis for the enclave pattern of
economic development laid during this period was the
channelization of private foreign capital into plantations,
initially coffee and tea and later :rubber and into agro-
processing industry principally coir. 28
While we trace the industrial development of Travancore,
Sir C. P. Ramaswamy Iyer deserves a special mention.
Industrialization of Travancore in the recent past had been
chiefly due to the genius, farsight and the characteristic
leadership of the former Diwan Sir C.P. Ramaswamy Iyer. He
invited outsiders to start industries here with the view that
capital and skilled workers are not sufficiently available in the
State. Even foreign companies reacted favourably to the call
given by him. Sir C.P.'s interest in industrializing the State
is evident from his following statements,
"My idea from the beginning was to start an industrial
revival in the state. Local attempts were tried, but
they failed. I shall give details of the failure
presently. This Government are definitely of the
opinion that ultimately, and I underline the word
*ultimatelyg, all the industrial enterprises that are
coming into existence and are functioning or will
function throughout the state, must belong essentially
to the people of the state, both with referygce to the
capital and personal direction and control."
"The question is whether... we should take the best
possible means now of starting these industries with
sufficient safeguards that those industries will come
into the hands of Travancore personnel or will be
worked in the interests, solely and exclusively of
Travancore. When that alternative comes before the
Government they would have no objection, nay would be
anxious to avail themselves of the services of any
agency, Indian or European, American or African, for
the purpose of starting thq8e industries and give a
push to them at the outset.l8
During the time of Sir C.P. Ramaswamy Iyer, the products
of industries of Travancore have dominated in most of the States
in India and to some extent abroad as well. Sir C.P. had made
clear that he was not prepared to sell the monopoly of any
concern to any foreigner however much expertise he had. On the
contrary, he tried his best for providing opportunities to
Travancoreans to acquire technical know-how and skill. Against
the various objections, he succeeded in obtaining the best
machinery in the world for the industries of the State. Sir C.P.
was very much aware of the importance of electricity in industry.
So he made several steps to boost the projects of electricity in
Travancore.
It is generally believed that the decade 1934 to 1944 was
the golden age of industrialization in the annals of Kerala
history. This is because, it is during this period that several
industries were established in Travancore and Cochin areas. The
preliminary work on the Travancore Rubber Works was completed in
1934-'37. The Sree Chitra Mills at Alwye established by M/s E.D.
Sasson and Co., Bombay, the Government Ceramics concern at
Kundara in Quilon District, the Indian Aluminium Company at
Alwaye, the Travancore Plywood Industries at Punalur and
Travancore Ogale Glass Manufacturing Company at Alwaye and
Travancore Rayons at Perumbavoor were started during this period.
1947-'48 also witnessed the establishment of several
industries in Travancore-Cochin. 31 It was during this period
that FACT was commissioned. Preliminary work on ALIND, Kundara,
Forest Industries at Alwaye and West Coast Industries in Cochin
were started. The construction work of Travancore Titanium
Products Ltd., at Trivandrum, Electro-Chemical Industries at
Chingavanam and the Electrical and Allied Industry at Kundara
were also started during this time. The completion of the Hydro
Electric Project at Pallivassal gave a boost and favourable
climate for the development of these industries.
2. 2. 2 Industrial Development in Cochin
Like Travancore, Cochin also enjoyed a good position in
the field of traditional industries. Since the beginning of 19th
century, coir, timber, coconut oil extraction, tile making,
handloom weaving were the predominant ones. In 1909 an
industrial survey was conducted in order to assess the
possibilities of industrialization. 3 2 Accordingly, some
Industrial Training Schools were started. They were both in
private and public sectors and were under the Department of
Education. In 1920, an economic survey was conducted and an
Industrial Advisory Board was established on the basis of its
recommendations. In 1925 when the Economic Development Committee
was formed, Industries Advisory Board was merged into it.
In Cochin where Sir Shanmugham Chetty had already set a
new phase of development, facilities were offered to investors to
come forward and organise industrial units. The resources of
the state being limited, the Cochin Government could not follow
the pattern of industrial development of Travancore. So
traditional industries were considerably expanded. New textiles
like the Alagappa Textiles, the Cochin Potteries, the Victory
Chemicals and Pharmaceutical works, the Tata Oil Mills, etc.
were established. 33
2.2.3 Industrialization in Halabar
Industrial development in Malabar owes much to the Base1
Missionaries (a Christian missionary group organized in
Switzerland) and their economic activities. Base1 Mission came
to India with many other Missionaries, with the policy change of
East India Company. Since 1834 the Missionary activities
flourished in Malabar-Konkan Coast. This process lasted till the
beginning of the First World War in 1914. 34
Three distinct phases35 can be observed in the industrial
activities of the Base1 Mission in Malabar and South Canara.
Base1 Evangelical Missionary Society or Base1 Mission activities
can be chronologically placed under the Early phase beginning
from 1834 to 1852, the Middle Phase beginning from 1852 to 1882
and the Final Phase beginning from 1882 to 1914. With the
outbreak of First World War, Base1 Mission activities in India
came to an end.
The Early Phase begins with the arrival of the
Missionaries in the Malabar coast in 1834. In 1846 the
Industrial Commission was established. In 1852 it was placed
under a separate treasury within the Mission. Jaiprakash
Raghaviah observes this event as an important turning point in
the organization of Missionary industrial activities.
36,36A
This marks the end of the First phase.
It was during the Middle phase that industrial activities
came increasingly under the Central Board of Industrial
Commission. Base1 mission gave new dimensions to the existing
traditional industries such as cloth weaving and tile making by
introducing machinery and thus providing a modern factory
outlook.37 This period is characterised by the establishment of
factory type of production organization. The Industrial
Commission which had existed in the Mission from 1846 was
reconstituted with a separate treasury, though it continued to be
a part of the Basel Missionary Society. The new Commission was
placed under professional management of the Christian merchants.
With these efforts, industrial activities of the Mission got a
boost. Weaving got much importance. Another important area was
the invention of dye of khadi from the bark of semicarpus tree.
The dye house at Quilandy was established by the Mission.
Later, mechanised knitting was introduced. Thus Base1
Mission factories were the first to manufacture banians and
stockinette materials. The other activities which evolved during
that period were mechanical repairing and fabrication, printing
and book binding and trading activities. Another type of
industry which flourished during this period was tile industry.
The manufacturing of tile was a century old profession,
traditionally undertaken by the potter cast in Southern India.
By the 19th century, public works like the construction of public
off ices, railway stations, etc. created a market for tiles. The
traditional tile maker was handicapped to meet the demand. The
problem with the use of traditional tiles was that it required a
heavy super-structure which was costly. 'Thus the stage was set
for the rapid expansion of Base1 Mission's machine made roofing
tiles.
With the outbreak of First World War, Enemy Trading Act of
1916 was issued by the Governor General in Council to prohibit
and control trading by hostile foreigners. The Madras Chamber of
Commerce immediately approached the Government of the Presidency
of Madras for winding up the operations of the company. They
feared that the fast growth of the company had challenged the
British commercial interest in India. On 22nd May 1919, six
months after armistice on the basis of an ordinance issued by the
Viceroy, the entire assets of the company in India were
sequestered by the custodian of enemy property. Under the
direction of the controlling officer, an inventory of possessions
was drawn up. Later the properties were transferred to Common
Wealth Trust Ltd. But due to the absence of further development
work, some of the units had to be sold off.
It appears that the pioneering efforts in modern
manufacturing owe to the Base1 Mission activities which started
industrial units in India even before the British showed interest
in this field.
By the time the world war was over, a fairly strong
industrial base was built up particularly in the Travancore
State. In the Travancore region a certain amount of planning
was done in the name of post war construction. A post war
reconstruction was set up under the Chairmanship of the Diwan.
Upto the First Five Year Plan this committee continued its
activities. The Government of Cochin rendered adequate financial
assistance to deserving concerns to tide over the post war
economic situation. It initiated schemes to bring the coir
industry within the co-operative fold. The Cochin Illdustrial
Board, a post war development functioned creditably well and it
made available industrial loan from newly constituted Industrial
Development Fund.38 Thus the two decades preceeding independence
were a period of many note-worthy achievements in industrial
field as far as Travancore was concerned. But the cochin and
Malabar region lagged behind.
2.2.4 Industrial D e v e l o m t during the Plan Periods
The industrial development of Kerala during the first 10
years after independence was not at all satisfactory. When
compared with that of 1936-47, the industrial advancement during
the period of Sir C.P. Ramaswamy Iyer was far better than that
of the period from 1947 to 56. Before the starting of Five Year
Plans, 39 industrial units were registered. But during the First
Plan only 7 factories were registered, one in Central sector,
two in the State sector and 4 in private sector. Plan-wise
outlay and expenditure for industry and minerals are discussed
below with the help of Tables and Figures.
F i r s t F i v e Y e a r Plan
The industrial schemes in the First Five Year Plan which
were implemented prior to the formation of the State of Kerala,
were confined to a few activities mainly in the area of
traditional small scale industries like coir, co-operative
schemes, survey of small scale industries, installations of an
electric tunner kiln in the Ceramic Factory at Kundara and
improvements to the Kerala Polytechnique at Kozhikode.
Comparatively very little importance was given to industries in
this Plan. The outlay for industries was 112 lakhs, 3.7% of the
total Plan outlay (See Table 2.4). The actual expenditure
incurred was less i .e. , Rs. 50.3 lakhs , and there was no Central
investment in the industrial sector. Dr. P.K. Gopalakrishnan
made the comment that in this plan indust:ries were relegated to
the status of a residual claimant.39 Though the First Five Year
Plan was a disorganized attempt at development, it gave the State
considerable experience of planning.
Second F i v e Y e a r Plan
Kerala was reorganized as a State only in November, 1956
and by that time the Second Five Year Plan was already
Table 2.4: KERAW: Outlay & Expenditure - Industry & Minerals
(Rs. in lakhs)
Periods
Outlay % Expenditure Expenditure as
% of outlay
First Plan 1951-56 112 3.7 5 0 44.6
Second Plan 1956-61 684 7.9 604 88.3
Third Plan 1961-66 1719 10.1 1437 83.6
Annual Plan 1966-69 1014 7.1 1334 131.6
Fourth Plan 1969-74 2208 8.6 *2604 113.3
Fifth Plan 1974-78 6154 10.8 *5478 87.8
Annual Plan 1978-80 4227 10.8 6707 158.7
Sixth Plan 1980-85 16459 11.1 *I6647 101.0
Seventh Plan 1985-90 21455 9.7 27260 127.1
Annual Plan 1990-92 15980 10 14970 93.7
Eighth Plan 1992-97 81000 14.84 --- ---
--
* Including special assistance.
Source: 1. Government of Kerala, State Planning Board,
Plan outlays and expenditure: Kerala 1951-52 to
1989-90, 1992.
2. ------- -------- , Eighth Five Year Plan 1992-97:
Wid-Tern Review, 1994.
formulated.
The Second Plan gave greater importance to industry,
when compared to the First Five Year Plan.
The total outlay for
industries was 6.84 crores i .e. , 7 -9% of the total Plan outlay
(See Table 2.4). More attention was given to the promotion of
small, cottage and traditional industries. They attracted 4.99
crores out of which 3.46 crores was utilized (See Table 2.4).
During this Plan also the State did not give any serious
thought to industrialization except taking steps towards the
expansion of production in Kundara Ceramic Factory and the Kerala
Cycles Private Ltd., in the establishment of a spinning mill in
Thiruvananthapuram and the organization of coir and handloom co-
operatives. In this Plan also Central investment was almost nil.
The Stearing Committee on Industry and Mining (1990) observes,
"Though there was substantial improvement in the
development of the industrial sector during the Second
Five Year Plan throughout the country, the investment
in Kerala was only 0.1 p cent of the total central
public sector investment." $6
The only industry established during this Plan by the
central government was the Insecticides Lt.d. at Alwaye.
Third F i v e Y e a r Plan
During this Plan, industry received slightly more
importance than the other two Plans. The outlay for industries
was 17.19 crores. This was about 10.1% of the total State
outlay. The actual expenditure was 14.37 crores, about 83.6% of
the total outlay for industries (See Table 2.4). Like the Second
Pive Year Plan, Third Plan also got a Gandhian touch. In this
Plan also small and cottage industries received a major portion
of the outlay - 8 crores. However, the case was quite different
in the field of large and medium industries. The outlay was only
4.54 crores but the expenditure was a huge 8.05 crores
(See Table 2.4).
The Fo u r t h Pive Pear Plan
The allotment for industries and mining in this Plan
was Rs. 2208 lakhs, which was 8.6% of total outlay. When the
outlay of the Fourth Plan is compared with that of the Third
Plan, it is found that the outlay for industries as a whole was
less than that of the former (See Table 2.4). The actual
expenditure was 26.04 crores which is 113.31 of the total outlay.
After the Third Plan and before the Fourth Plan, there was a gap
which was filled by Annual Plans. It was during this time that
the industrial policy of 1967 was issued, which asserts that the
State will function within the limits of the policy laid by the
Government of 1ndi.a." In the industrial policy statement The
Government has indirectly concerned that the performance of the
public sector undertaking in the State has been unsatisfactory.
The Government's determination to do away with this unhealthy
condition is embodied in the policy state~mnt.'~
In the light of the above policy, a few industries were
started in the State. In order to provide financial and
auxiliary facilities for the development of Handloom industry,
Kerala Handloom Finance Corporation was formed in 1968. It
entered the field of export trade in 1971. It was during the
Fourth Plan that the coalition Government formed a number of
corporations to rehabilitate or expand industries relating to
coir, cashew, handloom, textiles, minerals and handicrafts. The
existing industries like FACT was expanded. From 92 crores
investment, when the Plan ended it went up to 120 crores. Along
with many other industries, it was during this period that the
first steel complex at Feroke and the expansion of Traco Cable
were completed. Cochin Refineries, Hindustan Latex, Hindustan
Machine Tools, Modern Bakeries, etc. were established in Kerala
which were in the Central sector. Thus the Fourth Plan period
witnessed a tremendous growth in industria.lization.
The F i f t h F i v e Y e a r Plan
The total outlay for industrial development in this Plan
was 6154 lakhs which is 10.8% of the total outlay. The aim was
to achieve more industrialization by establishing new units and
the modernization of traditional sector. The total expenditure
during this Plan was 5478 lakhs. The percentage of expenditure
as per the outlay was only 87.8% (See Table 2.4).
The S i x t h F i v e Y e a r Plan
Before the Sixth Plan there were .Annual Plans (1978-80)
and the total outlay for industries during this period was 4227
lakhs which is 10.8% of the total outlay. The expenditure during
Annual Plans was 6707 lakhs which is 158.7% of the total outlay
(See Table 2.4). The Sixth Plan which commenced from 1985 put a
total outlay of 16459 lakhs, which is 11.1% of the total. The
total expenditure was 16647 lakhs, which is 101% of the total
outlay (Table 2.4). That is, the percentage of total expenditure
was higher than that of the Fifth Plan, but lower than the
percentage of expenditure of the Annual Plans. The expenditure
of medium and large industrial sector in the Sixth Plan was
11,848.69 lakhs. The expenditure for vil-lage and small scale
industries was 4632.24 lakhs which included a special assistance
of 17.16 lakhs (See Table 2.5).
The S e v e n t h F i v e Y e a r Plan
The Seventh Plan which commenced from 1985, envisaged an
outlay of 21,455 lakhs which was 9.7 percentage of the total.
The total expenditure was 27,260 lakhs which was 127.1% of the
total (See Table 2.4) . There was a steep growth of small scale
industries in Kerala during this Plan.
The Ei g h t h F i v e Y e a r Plan
The present Plan, started in 1992, envisages 810 crores
for industry and minerals. It is 14.84% of the total outlay (See
Table 2.4). One who goes through the budget outlays from the
First Plan to the present Eighth Plan, can see a substantial
increase of the investment in industries. In the First Plan the
outlay was only 1.12 crores against an outlay of 810 crores in
Table 2.5: KERAW: Plan-Wise Outlays and Expenditure on Village and
Small Scale Industries 5 Medium and Large Scale
Industries
(Rs. in lakhs)
Village & Small scale Medium & Large scale
~ndustries Industries
Plan/Period -
Budget Accounts Budget Accounts
Estimate Estimate
- .
First Five Year Plan
1951-56 * 50.43
Second Five Year Plan
1956-61 499.7 346.28 102.33 179.47
Third Five Year Plan
1961-66 800.00 629.52 **919.50 760.33
Annual Plan
1966-69
Fourth Five Year Plan
1969-74 1,007.00 1,011.25
Fifth Five Year Plan
1974-78 849.00 836.29
Annual Plan
1978-80
Sixth Five Year Plan
1980-85 4,450.07 4,615.0~***11,841.04 11,848.69
Seventh Five Year Plan
1985-90 7,040.50 7,392.81 14,135.00 19,684.64
Annual Plan
1990-.92
Eiqhth Five Year Plan
1.99%-.97 30,400.00 --- 50,000.00 ---
- ---
* Expenditure for both Village, Small Scale, Medium and Large
Industries
** Including Industrial Estate and Plantation Industry
*** Excluding Special Central Assistance of 17.16 lakhs
Source: 1. Govt. of Kerala, State Planning Board, Plan
Outlays and Expenditure Kerala, (1951-52 to
1989-90), 1992.
2. ----- ------ , Draft: Eight Five Year Plan,
1992-97 and Annual Plan 1992-93, Vol. 11, 1991.
3. Krishna Iyer, S., Kerala Economy, Tvm.: State
Institute of languages 1975 (in Malayalam).
the Eighth Plan. In the First Plan expenditure as percentage of
outlay was only 44.6 against 127.1 in the Seventh Plan. The
outlay for industries in the First Plan was a mere 3.7% when
compared to the huge 14.84% of the Eighth Plan (See Table 2.4).
These figures show how the Government gave continuously greater
importance to industrialization Plan after Plan. Fig 2.1 shows
the outlay and expenditure for industry and minerals through Plan
periods. The graph clearly shows, upto Sixth Plan outlay and
expenditure was somewhat the same. But in the Seventh Plan the
expenditure was much higher than the Plan outlay.
In the First Plan separate allocation was not made for
village and small industries (VhSSI) and medium and large scale
industries (M&LSI) (See Table 2.5). Separate allocation was made
during the Second Plan onwards. Much thrust was given to VhSSI
in the Second Plan and this was the only Plan which gave an
outlay for V&SSI higher then MhLSI. (Outlay for VLSSS was 5
crores against 1 crores for M&LSI (See Table 2.5). In the
following Plans, the outlay for VhSSI began to decrease when
compared to H&LSI. In the Eighth Plan the outlay for VLSSI was
304 crores aganist 500 crores for M&LSI (See Table 2.5). Fig.
2.2 shows clearly the disparity between expenditure for VLSSI and
M&LSI . The year-wise break up of expenditure on Khadi and
Village Industries, Small Scale Industries and Medium h Large
Industries are provided in Table 2.6.
2. 6: KERALA: Year-Wise Break-up of Expenditure on
Village Industries, Small Scale Iridustries
and Medium and Large Industries 1900 to 1995
(Rs. in lakhs)
KHADI AND VILLAGE SMALL SCALE MEDIUM & W l G E
INDUSTRIES INDUSTRIES INDUSTEIES
Period -
Budget Budget Budget
Estimate Accounts Estimate Accounts Estimate Accounts
* Special Central Assistance (Rs. 8.80 lakh) included
** Anticipated
Source : 1. Government of Kerala, State Planning Board,
Plan Outlays and Expenditure Kerala (1951-52 to
1989-go), 1992.
2. -------- ------- , Eighth Five Year Plan 1992-97
Hid-Term Review 1994, p. 132, 144, 155.
Figure: 2.1 Kerala: Industry & Minerals - Outlay and Expenditure
0 OUTLAY + EXPENDITURE
Figure: 2.2 Kerala: Expenditure for Village and Small Scale b
Medium and Large Scale Industries
0 '$illage a Smai i Ind + Medi um & Lor ge Ind.
21 -
20
19
18
1 7
16
15
1 4
13
12
11
10
9
8
7
6
5
4
3
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 1;
0 . FI RST(1951-55) -y-cd/ THIRS(195:-66) Fi Fl H( 1974- 78) 7 I SEVF.NTI-I(I I 985-
SECCND(i 956-6 i j t ouRTH( 1969- 74) S1XTI-r.C 1980-.35)
<----- Pl an eeri ods ------>
Table 2.7: KERALA : Central Sector 1ndustri.al Investment
(Rs. In crores)
Year Investment as on 31St March % of column (3)
...........................
All India Kerala to column(2)
Source: Economic Review (various issues)
2. 2. 5 Central Sector Investment in Kerala
Table 2.7 shows the Central sector industrial investment
in Kerala. At a glance one may feel that the investment in
Kerala is increasing year after year according to the increase in
the all India level. But when the percentage share to Kerala is
calculated, one can see a gradual decrease (Table 2.7: Fig.
2.3). Thus when the percentage share of Kerala in 1970 was
3.069 it was only 1.31% in 1993. This decrease will be further
deepened, if we calculate the investment on the per capita
basis, as Kerala is accommodating a population of 4% of the total
population of India.
2.2.6 Working Factories and Employrent in Kerala
At the end of December 1993 there were 14399 registered
working factories in Kerala. Between 1992 and 1993 the
increase in working factories was 453, an increase of 3.25 per
cent over the previous year. During this period the increase in
workers was 7133 i.e., an increase of 1.78 percent over the
previous year's. Growth of the working factories and employment
in Kerala since 1960 is given in Table 2.8.
2.2.7 Traditional and Small Scale Industries in Kerala
The major traditional industries in Kerala include coir,
handloom, cahsew, khadi and village industries, beedi, bricks,
tile and bamboo industries. Coir industry provides direct
employment to about 3.83 lakh workers and thus occupies the
Table 2.8:
KERALA : Number of Registered Working Factories
and Employment
--
Year No. of Factories Employment No.
* provisional
Source : Economic Review (various issues)
2. Govt. of Kerala. Directorate of Economics
and statistics. Statistics for planning.
1990. p. 35.
Table 2.9: KERALA: Year-Wise Break-up of Outlay and Expenditure
for Traditional Industries 1980-1995
Handicrafts Handloom industry Coir industry
-
Period -
Budget Budget Budget
Estimate Accounts Estimate Accounts Estimate Accounts
1994-95 100.00 --- 740.00 --- 850 .OO
---
* including special Central assistance Rs.8.36 lakh
Source: 1. Government of Kerala, State Planning Board, Plan
Outlays and Expenditure Kerala (1951-52 to 1989-90).
1992
2. ------ ------ ,Eight Five Year Plan 1992-97 Uid Term
Review, 1994.
formost place among traditional i n d u ~ t r i e s . ~ ~
According to the
Stearing Committee ~ e ~ o r t ~ ~ on Industry and Mining 1990, c0ir
industry accounts for 44% of the labour force in traditional
industries. Handloom industry accounts for 20%, Khadi and
Village industries 11% and Cashew industry 10%. Handicrafts and
other traditional industries represent the remaining 15%. Table
2.9 shows the year-wise break up of the outlay and expenditure
for Tradititonal Industries. The performance of khadi and
village industries in Kerala since 1977-78 is furnished in Table
2.10.
There is a phenomenal growth of small scale industries in
Kerala, especially during the Seventh Plan. The number of small
scale industrial units increased from 31,499 at the end of Sixth
Plan to 55,427 at the end of 1988-'89 registering an increase of
76% over a period of four years. 45 These units, at the end of
1988-89, with a total investment of Rs.660 crores and employment
of 3.67 lakhs persons produced goods worth Rs.1724 crores. Table
2.11 shows the annual growth of small-scale industrial units from
1980-'81 to 1993-'94. 1993-'94 witnessed a tremendous growth in
small scale units. 14,533 units were registered in the financial
year against a target of 10500 units and accomadated more than
ten thousand jobless when compared to the previous year. A
remarkable increase was also noticed in the value of goods and
services produced as high as 622 crores compaired to 263 crores
of 1992-'93.
Table 2.10: KERALA: Performance of W a d i and Village Ind~~tries
Year Production Sales ~m~loyment* Wages
( lakhs ) (lakhs) (Nos. ) ( lakhs)
1977-78 863.73 944.13 84,359 403.47
1978-79 1,035.56 1,122.17 1,11,495 500.80
1979-80 1,329.77 1,456.25 1,01,555 583.31
1980-81 1,694.81 1,808.00 1,23,328 882.89
1981-82 2,697.82 2,824.23 1,34,125 1,055.74
1982-83 2,656.31 2,801.46 1,43,585 1,248.87
1983-84 2,575.59 2,779.12 1,44,437 1,127.48
1984-85 3,323.24 3,448.55 1,52,462 1,201.05
1985-86 4,228.85 4,496.56 1,613,084 1,744.05
1986-87 4,794.96 5,116.68 1,621,098 1,469.86
1987-88 4,819.10 5,252.33 1,73,647 2,132.00
1988-89 5,526.49 5,896.59 1,79,257 1,949.70
1990-91 7,478.03 8,290.80 1,92,901 2,879.40
1992-93 9,400.52 10,494.17 1,7E1,103 2,759.71
1993-94 9,727.94 11,077.66 1,76,362 3,128.56
* ~ncludes-part-time and casual labours
Source: 1. Econcmic Review (various issues)
2. Government of Kerala, Direcorate of Economics &
Statistics, Statistics for Planning 1983, 1983.
Table 2.11: KERALA: Growth of Small Scale Industrial Units.
No. of Value of goods Employment
year small scale Investment & services
provided
units (in lams) produced ( Number )
(Rs. lakhs)
1993-94* 14,533 16,627.75 62,206.10 60,945
* Provisional
Source : Economic Review - Various issues
The Government of India have launched a new scheme namely
'Prime Minsters Rozgar Yogana' (PMRY) on 2nd October 1993 for
providing self employment to the educated unemployed youth in
urban area.
2. 2. 8 Industrial Promotional Agencies
Government's effort to promote industrialization in the
State can be traced back to the introduction of various
industrial promotion agencies.
Kerala State Industrial Development Corporation
KSIDC was established in 1961. It is the nodal agency for
the promotion of large and medium scale industries in Kerala.
Kerala Financial Corporation
Its prime objective is to encourage and promote
industrialization in the State by providing loans to small and
medium scale industries. During the span of 40 years the
corporation has sanctioned Rs.641 crores to about 20,000 small
and medium scale units in the State.
Small Industries Development Corporation
The main activities of SIDCO are to aid, counsel, finance,
protect and promote the interests of small scale industries in
the State. The raw material division of SIDCO procures and
distributes scarce raw materials to the registered small scale
industrial (SSI) units in the State. It gives financial
assistance to boost the development of SSI.
Small Industries Service Institute
This stands unique in the field of providing technical and
managerial consultancy services to a number of industrial units.
Besides, it prepares several technical reports for the benefits
of existing as well as prospective entrepreneurs.
Kerala Industrial and Technical COnSUltan~y Organization
KITCO also stands as an organization providing consultancy
service to entrepreneurs and managements on project preparation,
civil works, engineering aspects, energy conservation, industrial
management and business promotion.
Handicrafts ObVelOpmOnt Corporation of KeraZa Ltd.
The main objective of this corporation is to protect and
develop handicrafts industry within the State by marketing the
products in India and abroad. Procurement and distribution of raw
materials to artisans at subsidised rates, collection of finished
handicrafts goods at fair prices, exhibition and sales of
handicrafts all over India, financial assistance to artisans,
etc. are the major activities of the corporation.
Ratio- Small Industries Corporation
NSIC stands prominently in the iield of industrial
promotional agencies. The organization is providing machinery
-62-
for small entrepreneurs on loan basis. The re-payment of the
loan should be made on instalment basis.
Khadi and Village Industires Board
The Board has been functioning in Kerala from 1957 as a
statutory board for implementing programmes for the development
of Khadi and Village Industries. KVIR has been providing
employment opportunities to the rural population through its own
production centres, registered institutions and co-operative
societies. One of the objectives of the Board is extending
financial and technical assistance to artisans engaged in khadi
and village industries through co-operative societies, charitable
institutions and individuals.
Besides these eight, there are several other agencies
such as Coir Co-operatives, Coir Marketing Corporation (Coirfed),
Handicrafts Development Corporation, Kerala State Bamboo
Corporation Ltd., Kerala State Handloom Weavers Co-operative
Society Ltd. and Cashew Development Corporation to promote the
concerned traditional industries.
2.3 Conclusion
Several important conclusions can be drawn from the above
survey of industrialization in India and in Kerala. Some of
these conclusions that are relevant to the thesis are listed
below.
(i) There was a time when small scale industries flourished in
India. But this healthy trend changed after the advent of the
British.
-63-
(ii) During the British rule in India large scale industries
gained prominance. The British preferred goods of their own make
to the Indian goods. This led to the decline of traditional
industries in India.
(iii) With the growth of modern industries large scale
industries were encouraged by the Government with the result that
small scale industries received little attention.
(iv) The industrial policies, even those that were formulated
after independence, promoted large scale industries, though there
were arguments favouring the harmonization of both small and
large scale industries.
(v) The situation during the Five Year Plan periods was not very
different. For, the Five Year Plans too paid greater attention
to large scale industries without paying much attention to the
problems that they create for the environment.
(vi) In Kerala also the process of industrialization has been
very much in tune with the policies and plans of the Central
Government.
(vii) Today the Governments both Central. and State are realizing
more and more the need and the urgency of promoting small scale
industries. This is particularly noticable in the industrial
policy statement of 1991, which recognizes the importance of
protecting the environment.
In short, when one looks at the history of
industrialization in India and in Kerala, what is revealing is
that the small scale industries did not get the attention they
deserve. Another striking aspect of this industrialization is
that it did not take seriously the problems of pollution and
depletion of natural resources.
References
1. 'Report of the Indian Industrial Commission 1916-18', p.6.
ci t ed in S.C. Kuchhal, The Industrial Ecomry of India, 1975
ed., p.27.
2. S.C. Kuchhal, The Industrial Economy of India, 1975 ed.,
p.29.
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