The Sorry State of Cottage Industry in India

Posted on August 1, 2011 in Biz and Eco

By Ankur Garg:

Mahatma Gandhi’s use of charkha during independence was an important breakthrough for Indian handloom but being a small scale industry, it’s now unable to take the pressure from its mechanised counterpart. Cottage industry is a very vast industry comprising handloom, pottery and many other such professions. In this, most of the work is done at home using the items commonly available at homes and the labour is also provided by the family members.

Since it is highly unorganized, the workers despite being working for years, are still in the same financial position. The middle men in the mean time have risen from small cottages to big bungalows. The poor spend all their life working and still end up remaining poor. They are constantly cheated and fooled by the middle men and other people who take benefits from the work of these people. A recent article that I came across presented the conditions of a once prosperous handloom centre in Andhra Pradesh’s Medak district- Dubakka. Once consisting of more than 1500 handloom workers, now, the figure has fallen to 700 as its products have become uncompetitive in the market. Around twenty suicide cases have been reported among the handloom weavers over the last four years. Many more have gone unreported. The situation for weavers is desperate.

Cottage industry is considered for its enormous potential of providing employment. But, over the years, employment may have increased in this industry but the income of the people has definitely decreased as the middlemen offer low prices to the manufacturers but take heavy chunks of money from the buyers.

But, it is not only the middlemen and the dealers. The new revised foreign policies, globalisation is also responsible for the current condition of cottage industry. The handloom weavers are facing constant competition from the power looms. These workers have given their whole life to stitching and knitting. The skill that they possess is just unmatchable. But, still they are at the same place where they had started years ago.

An industry, providing employment to a large section of our population is in such distress. With over 4 million people engaged in handloom industry, such a condition proves the adversities which these people are facing. An interesting point to note is that out of the total people engaged in this industry, around 47% are below poverty line. Also, according to the new census, the average annual household income of these people is just Rs 41,068. And given the large family size among this section of the society, the per capita income is just a little more than nothing.

It is high time now that the Government took some initiatives. Though in every budget, new promises are made, new policies are made. But, so far none of them has benefitted these people much. They are almost in the same conditions as they were decades ago. Though there’s a marginal increase in their income but if at the same time, we also notice the increase in the expenditures, then, we can say that in fact they are worse now than they were earlier.

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Ankit Dwivedi

Thnx for sharing this…
Could you please serve us with opinion on how FDI in retail will impact the shabby state of Indian cottage industry…!


The government organizes different exhibitions in different parts of the country providing these people chance to showcase their handicraft. I think that’s commendable but from our part we should also encourage them by buying stuffs from them. And people are appreciating it as well and the handmade things are so beautiful that you can’t escape them.

    Ankur Garg

    Hi Harshita,
    Over the years, big corporates have realized the potential of this industry. Few companies now source these products from India and sell them in foreign markets.
    Government has also taken few steps, one of them (as you mentioned), organizing handloom festivals – one of the largest held in Surajkund.

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