ACKNOWLEDGEMENT

I feel deeply indebted and grateful to my esteemed course

Mentor and Guide Prof. Amalendu Jyotishi and Prof. Girish.M for

the Guidance and Encouragement provided to me during the

Course of my project.

I wish to express my gratitude and sincere thanks to esteemed

Project guide and Mentor Mr. K.K. Sinha (Chairman & Managing

Director), Mr. Nirmal Sinha (General Manager), Dr. B.M. Prasad

(Manager – P&A) and Smt. Annu Bhogal (Company Secretary)

for their exemplary and encouragement throughout the making of

this project.

In the end I will thank my parents who gave me all the required

support while making the project.

1

THANK YOU

Hanish Goswami

DECLARATION

I declare that this project on “THE HANDICRAFTS AND HANDLOOMS EXPORT CORPORATION OF INDIA LIMITED” is a record of my own work, which was carried out by me under the guidance of Prof. Amalendu Jyotishi and Prof. Girish.M. I have prepared this report during my internship programme (12th March to 19th April). It is a partial fulfillment of the requirements towards the award of Masters in Business Administration, Ohio University, Athens, USA.

I also declare that this project is the result of my own effort and that it has not been submitted to any other university for any other degree.

Place: Bangalore Hanish Goswami

Date:

2

CONTENTS

The Background………………………………………………………………………5

The Organization……………………………………………………………………..9

Main Products………………………………………………………………………..13

Financial Analysis……………………………………………………………………21

Marketing Strategy…………………………………………………………………38

Financial Problems………………………………………………………………….40

Scenario Analysis……………………………………………………………………42

Perspective Planning……………………………………………………………….44

Identified Problems of Research………………………………………………..48

Conclusion…………………………………………………………………………....52

Recommendations………………………………………………………………….55

Bibliography………………………………………………………………………….59

3

EXECUTIVE SUMMARY

The Handicrafts and Handlooms Export Corporation of India Limited

Is a Central Public Sector Undertaking under the administrative control of the

Ministry of Textiles, Government of India. Its objective is to undertake

exports of handicrafts, handlooms products, khadi and products of village

industries from India as supplement to private voluntary effort. The

Corporation brings to us the masterpieces with finesse of human creativity in

authentic and rarest forms.

The main objective of the internship is to have a good corporate exposure.

This report describes the Corporation in general and consists of various

sections. I have started by describing the history of Art, Handicrafts &

Handlooms in India which gives a brief idea about them. After that, I

continued with Company profile which includes the mission, vision,

objectives, liaisons and their products profile. Then, I discussed the Financials

with the help of certain charts, graphs and tables which is followed by

marketing strategy, current scenario and its future prospects. In the end, I

gave my own conclusions & recommendations by interpretating the available

data and internal scanning of the Corporation.

While working in the organization, I saw how the things worked

systematically in a Government organization, how people respond to tough

situations and how efficiently the management takes important decisions. I

4

was given the opportunity to work in different departments where I came to

know about the certain departments in detail.

During the internship programme, I found out that overall the corporation is

doing well, however, there are some areas which needs proper attention.

There are some marketing problems which need to be looked upon. The

Corporation is taking certain steps to fix these problems.

BACKGROUND

Art and Crafts comprises of a whole host of activities and hobbies that are

related to making things with one's own hands and skill. These can be sub-

divided into handicrafts or "traditional crafts" (doing things the old way) and

handlooms. Some crafts have been practiced for centuries while others are

modern inventions.

The ground of art history was developed in the West. The oldest existing art

forms include small sculptures and paintings on rocks and in caves. The

earliest examples of ancient art developed from Mesopotamia and Egypt.

Art is basically an outward expression of one’s creative qualities and is an

outcome of our hidden talents. It is a medium of creating beautiful and

momentous qualities. Though art and artistic excellence is something

acquired and inborn, it can still be learnt by regular practice and minute

observation. It always stimulates our emotions, beliefs, thoughts, and ideas

through our senses.

Craft refers to the products of artistic production or creation that require a

high degree of tacit and technical knowledge. Most crafts require a

combination of skill, speed, and patience.

5

Indian Crafts have an importance of their own. They express the great

tradition of our cultural heritage. In India, it is believed that

Craftsmanship=Plato’s idea of specialization onto which the lower society has

a specific job in society. In India, craft is always associated with art.

The traditional characteristics are very much predominant in Indian

Craftsman. A Craftsman inherits his technical skill generally from his father or

grand father who may have inherited their technical skills from their

forefathers. The process of transmission of skill from generation to generation

is a very important factor in the history of Indian Craftsmanship. The

Craftsman is considered as an organic element in the national life of our

country.

HANDICRAFTS

Handicrafts occupy an important place in the country’s economy as they

contribute significantly to the Employment generation and Export earnings.

India has a rich history of handicrafts that has evolved over the centuries.

The entire wealth of timeless Indian handicrafts has survived through ages.

The legacy of Indian culture promises everything- Beauty, Dignity, Form and

Style.

Handicrafts are described as the craft of the people. In India, it is not an

industry but it is a creation symbolizing the inner desire and fulfillment of the

community. While handicrafts i.e. Metal ware, pottery, mats or wood-work

serve a positive need in the daily life of the people, they also act as a vehicle

of self-expression.

The handicraft tradition in India has revolved around religious beliefs, local

needs of the commoners as well as the special needs of the patrons and

royalty, along with an eye for foreign and domestic trade. These handicraft

6

traditions have withstood the ravages of time and numerous foreign

invasions and continue to flourish till date.

During the Indus Valley Civilization, India had a rich craft tradition as well as a

high degree of technical excellence in the field of pottery making, sculpture

(metal, stone and terracotta), jewelry, weaving etc. The craftsmen not only

catered to all the local needs but surplus items were sent to ancient Arabian

cultures. In the Vedic Age, there were numerous references in the Vedas on

artisans involved in pottery making, weaving, wood crafting etc. The Rig Veda

in particular refers to a variety of pottery made from clay, wood and metal. It

also refers to weavers and weaving.

The Gupta Age witnessed the classical period in Indian history which includes

the rock cut temples of Ellora and the Ajanta murals. These murals gave us a

realistic view of the lifestyle of that time. The craftsmen of that period

excelled in jewelry making, woodcarving, sculpture, stone carving and

weaving.

The Golden period in the history of Indian Art, Craft and Culture was the

Mughal Era. The Mughals not only invaded India and ruled it but also brought

with them a rich heritage. They introduced new techniques like inlay work,

glass engraving, carpet weaving, brocades and enameling. The famous

Peacock Throne of the Mughals is one of the finest examples of gem inlay

work and metal craft, having few parallels in world art. They also laid the

foundation for the famous Mughal miniature painting, Petra dura or inlay

work, enameled jewelry and a host of other craft traditions, many of which

continue today.

The artisan was an important factor in the equation of Indian society and

culture. By performing valid and fruitful social functions for the community,

he earned a certain status and a responsible position in society. The bold

7

local styles that the village artisans evolved operated as a great lever in the

evolution of Indian art adding to the wealth and variety of color and design.

The craftsman was the unbroken link in the tradition that embraced both the

producer and the consumer within the social and religious fabric. Art was

deeply rooted in them. Thus, Indian handicrafts express a great national

heritage.

HANDLOOMS

Handloom constitutes a timeless facet of the rich cultural heritage of India. As

an economic activity, the handloom sector occupies a second place after

agriculture in providing livelihood to the people. The element of art and craft

present in Indian handlooms makes it a potential sector for the upper

segments of domestic as well as global markets.

Handlooms are an important craft product and comprise the largest cottage

industry of the country. Million of looms across the country are engaged in

weaving cotton, silk and other natural fibres.There is hardly a village where

weavers do not exist, each weaving out the traditional beauty of India’s own

precious heritage.

Handloom also forms a precious part of the generational legacy and

exemplifies the richness and diversity of our country and the artistry of the

weavers. The strength of handloom lies in introducing innovative designs,

which cannot be replicated by the Power loom sector.Tradition of weaving by

hand, is a part of the country’s cultural ethos. Handloom is unparalleled in its

tradition and versatility, permitting experimentation and encouraging

innovation. Innovative weavers with their skillful blending of myths, faiths,

symbols and imagery provide their fabric an appealing dynamism.

8

In the world of handlooms, there are Madras checks from Tamil Nadu, ikats

from Andhra and Orissa, tie and dye from Gujarat and Rajasthan, brocades

from Banaras, jacquards from Uttar Pradesh and phulkari from Punjab.

Despite this regional distinction, there has been a great deal of technical and

stylistic exchange. The states of Kashmir and Karnataka are known for their

mulberry silk. The Kashmiri weavers are known for Pashmina and Shahtoosh

shawls all over the world. These shawls are of fine quality, unbelievably light

and warm.

India also produces a range of home furnishings, household linen, curtain

tapestry and yardage of interesting textures and varying thickness. Since we

know the wide and exciting range of handloom, it is not surprising that the

rich and beautiful products of the weavers of India have been called

“EXQUISITE POETRY IN COLORFUL FABRICS”.

THE ORGANISATION

THE HANDICRAFTS & HANDLOOMS EXPORTS CORPORATION OF INDIA LTD. Is

a Central Public Sector Undertaking under the administrative control of the

Ministry of Textiles, Government of India.

It was established in the year 1958 as Indian Handicrafts Development

Corporation Ltd (IHDC) and Incorporated as a Private Ltd. Co. in June 1962 as

a subsidiary of State Trading Corporation (STC).In May 1991, it De-linked from

STC and made an independent PSU under the Ministry of Textiles.

HHEC is a trading house in the export of Handicrafts and Handloom products

(including Hand knotted woolen carpet and ready made garments) besides

9

undertaking export of Gold and Silver Jewelry articles. In the year 1997-98,

HHEC along with ten agencies was nominated for import of bullion under

OGL, and sale in the domestic market. In keeping with its plan for

diversification, HHEC also undertook import of mulberry raw silk.

MISSION

To develop, promote and aggressively market the products of Indian crafts

and skills abroad thereby providing a marketing channel for craftsmen and

artisans.

VISION

Endeavor to promote India aggressively in the world arena and create

demand for craftsmanship products by continuously adapting supply to the

changing consumer habits of the demand countries.

On a continuous basis, allocate resources to help new products in India and

market them to the world, thus creating opportunities for manufacturers

/craftsmen and other private players in India.

Act as a marketing arm for exports from manufacturers/ craftsmen who

cannot afford having their own marketing set-ups.

Consistently supply buyer’s products of high quality, right price and on

schedule thus keeping up the image of Indian products in the world market.

OBJECTIVES

To undertake exports of handicrafts, handlooms products, khadi and

products of village industries from India as supplement to private voluntary

effort.

10

To undertake special promotional measures in countries whose import

potential for Indian handicrafts products, khadi and products of village

industries has not been adequately tapped.

To trade in and carry on business in goods of the nature which may seem

to the company capable of being conveniently and profitably carried on by

the company.

VALUES Buyer’s satisfaction.

Transparency and courtesy.

Prompt and professional service.

Compassion and better business sense.

COMMITTMENTS

They are committed

To provide quality merchandise to foreign buyers within the stipulated

delivery schedule.

To provide avenues for better prices to the artisans, weavers and craft persons. To provide technical, financial, marketing and other assistance to the

artisans, weavers, crafts persons and foreign buyers.

To improve the profitability of the Corporation and to give the

Government better returns for the money invested by it.

To ensure original handmade/ crafted products of Indian origin.

To ensure revival of languishing art & craft of India.

BRANCHES IN INDIA

HHEC Offices are located in different parts of India. The main branches are in

Registered Office in New Delhi

11

Corporate Office in New Delhi

Chennai Regional Office

Mumbai Regional Office

Kolkata Regional Office

Bhadohi Branch Office

Ahmedabad Branch Office

Srinagar Branch Office

ORGANISATION HIERARCHY

BOARD OF DIRECTORS

Chairman and Managing Director Shri K.K. Sinha

Directors Shri Jamini Kumar Sharma, IAS

Smt.Sarita Mittal Shri B.P.Singh, IAS General Managers Shri Apurva Verma, IAS

Shri Nirmal Sinha

Company Secretary Smt. Annu Bhogal LIASONS

Ministry of Textiles

Ministry of Commerce

Standing Conference on Public Enterprises

Office of the Development Commissioner (Handicrafts)

Office of the Development Commissioner (Handlooms)

All PSUs under the Ministry of Textiles

Indian Trade Promotion Organization

Export promotion Council for Handicrafts

Wool & Woolen Export Promotion Council

12

Carpet Export Promotion Council

All State Emporia

Various Councils in India and Abroad

Foreign Missions- Indian Embassies etc.

MAIN PRODUCTS

The organization deals in

HANDICRAFTS PRODUCTS

HANDLOOM PRODUCTS

GARMENTS

FLOOR COVERINGS

CARPETS

LEATHER

HANDICRAFTS13

Handicrafts occupy an important place in the country’s economy as they

contribute significantly to the Employment generation and Export earnings.

India has a rich history of handicrafts that has evolved over the centuries. In

India, it is not an industry but it is a creation symbolizing the inner desire and

fulfillment of the community. While handicrafts i.e. Metal ware, pottery, mats

or wood-work serve a positive need in the daily life of the people, they also

act as a vehicle of self-expression.

HHEC has been involved for the past four decades in development and

exports of handicrafts utilizing the crafts skills from all over India to create

visually appealing and economically suitable products for the world markets.

The main products of HHEC are Wooden, stoneware, metal ware, glassware,

papier machie, glassware, clay, terracotta, ceramics and their various blends

as objects of art and utility.

HANDLOOMS

Handloom constitutes a timeless facet of the rich cultural heritage of India. As

an economic activity, the handloom sector occupies a second place after

agriculture in providing livelihood to the people. The element of art and craft

14

present in Indian handlooms makes it a potential sector for the upper

segments of domestic as well as global markets. They are considered as an

important craft product and comprise the largest cottage industry of the

country.

HHEC has an exhaustic range of fabrics for dress ware and home furnishing in

cotton, silk, wool and various blends. This range includes woven, checks,

stripes, textures, dobbies, jacquard, prints, embroideries, Tie & Dye and other

embellishments.

Design Style-Printed, Woven, Embroidered, Other embellishments & Mix

Media.

GARMENTS

15

The term “Textile” is a Latin word originating from the word “texere” which

means “to weave”. Textile refers to a flexible material comprising of a

network of natural or artificial fibers, known as yarn. Textiles are formed by

weaving, knitting, crocheting, knotting and pressing fibers together.

Indian textile enjoys a rich heritage and the origin of textiles in India traces

back to the Indus Valley Civilization. The textile industry is the largest

industry of modern India. It accounts for over 20 percent of industrial

production and is closely linked with the agricultural and rural economy. It is

the single largest employer in the industrial sector employing about 38

million people. The contemporary Indian textile not only reflects the splendid

past but also cater to the requirements of the modern times. Knitted

garments are extremely popular in the modern fashion scene. Modern design

has a major impact on knitwear and made it an exciting area of modern

fashion trends.

HHEC has state of art production based in Chennai and Delhi. They have

exported to some of the leading designer houses and garments importers in

the U.S.A., Europe and Japan. Their range includes sports wear, casual wear

and formal wear in Cotton, Rayon, Silk, Wool and other blended fabrics. The

fabrics used to manufacture garments include all type of fabric used for

exports markets mainly using georgette , moss crepe, cotton crepe , rayon ,

voile and terry voile, polyester fabric for prints and solid colors.

16

FLOOR COVERINGS

Pleasing to the eye and soothing for the mind, the floor coverings of India are

heart-winners. India offers a wide range of floor coverings that have evolved

over the centuries to suit a variety of tastes, climates and budgets. Being

mostly export- oriented, the weavers can produce almost any design.

HHEC offer a vast collection of floor coverings from every part of India,

comprising of:

17

Dhuries- Cotton, Wool, Jute (In woven, printed, and tie & dyed designs)

Floor Mats- are available in cotton chenille and jute blends.

Chain Stitched Rugs- are available in wool on cotton base floral, kelim and

contemporary design.

CARPETS

Woolen carpets were known in India as early as 500 B.C. References to

woven mats and floor coverings can be found in ancient and medieval Indian

literature. But the most famous type of Indian carpets, pile carpets came to

India in the reign of Akbar in 16th century. The Indian carpets are considered

most technically accomplished classical carpets. The carpet weavers over the

time have grown artistically. Indian Carpets are renowned for their exquisite

designs, elegance, attractive colors and workmanship.

HHEC is the pioneer export house which introduces Indian hand woven

carpets to the world markets. Their range includes a vast array of designs:

Traditional- (in wool and silk)

Tribal- (Gabbech)

Tufted- (An Indo Nepal Variety)

18

LEATHER

Leather tanning as art form reached its zenith in India by 3000 B.C. The

earliest skins used were of tiger and deer. This is an old hereditary craft and

is probably as wide spread as earthenware. Because of its wide prevalence in

the rural areas, much of the tanning is locally done by indigenous methods

which are pretty laborious. HHEC range comprises of Gift-ware, Furniture,

Office table and Fashion accessories in plain, printed, painted and embossed

leather.

19

SEGMENT ANALYSIS

The key business segments of the Corporation comprises of Handicrafts

(including carpets), Handlooms, Gold Jewelry, Bullion and Others. The

geographical segment comprises of inside India and outside India.

Rs. In crores)

Products 2005-06

2004-05

Handlooms 33.39 35.11Handicrafts 5.27 8.09Garments 7.86 6.46Carpets 0.09 0.16Sub total 46.61 49.82Jewelry 12.02 28.36Total 58.63 78.18

Table no.-1

The above table depicts the Product wise export sales for different products.

In the year 2005-06, direct exports amounted to Rs. 46.62 crores as against

Rs. 49.82 crores last year and indirect exports amounted to Rs. 12.02 crores

as against Rs. 28.36 crores last year. Total exports amounted to Rs. 58.63

crores as against Rs. 78.18 crores.

20

The Corporation also Import goods from different countries. The two main

import products are Bullion Bars and Gold Coins which accounts for Rs.

1004.17 crores in the current year as against Rs. 1221.05 crores.

LIST OF MAJOR SUPPLIERS

PRODUCTS NAME OF SUPPLIERS

HANDICRAFTS

Needa Handicrafts , Agra Verma Handicrafts, New Delhi New Jan Khan & Co., Srinagar Ganpati Creations, New Delhi Adivasi Shilp, New Delhi Raghunath Prasad Creations, New Delhi Hansraj Handicrafts, New Delhi Ibrahim & Co., Srinagar Shameem Handicrafts, Uttar Pradesh Asian Art & Handicrafts, Agra

HANDLOOMS Salman Handlooms, Uttar Pradesh Alfa Handlooms Weavers Industrial Cooperative

Society, SrinagarBULLION MKS Finance Limited, Switzerland

M/S NATEXIS Commodity Markets Limited, England Bin Sabt , Dubai

FLOOR COVERINGS

Bhat Cottage Collections, Srinagar Variety Creations, Uttar Pradesh

SILVER Gadhecha Trading Private Limited, Ahemadabad AaryaVart Impex Private Limited, Ahemadabad Satlon Investment Private Limited, Ahemadabad Solar Trading Private Limited, Mumbai Rukma Industries Limited, Chennai

LIST OF MAJOR BUYERS

COUNTRY NAME OF BUYERS

FRANCE

Naf Naf Boutiques La Petite American Retro Index International Sa La Redoute Sner 3 Suisse’s

HONG KONG Tolani & Associates Best Seller Wholesale A/S

21

DENMARK Veromoda Vila A/s

AUSTRALIA Rockman’sSPAIN Bershka

ZaraITALY Modafil; Sas

UNITED KINGDOM

Top Shop Dorothy Perkins The Burton Group Plc T/A

UNITED STATES OF AMERICA

Kiko Clothing Provence D’amour LLC Gunther By Nash & Sarin

NORWAY Best Seller A/S Vila A/S

FINANCIAL ANALYSIS

CAPITAL

The Authorized and Paid up Capital of the Corporation remained unchanged at

Rs. 20.00 Cr. and Rs. 13.82 Cr., respectively during the year 2005-2006. The

entire Paid up Capital has been subscribed by the President of India.

TURNOVER

The Corporation achieved a turnover of Rs. 1065.13 crores in the year 2005-

06 as against Rs. 1302.17 crores in the previous year showing a decline of

18.2%. The decline in the turnover is mainly due to the steep price spurt in

international market of bullion imports and also due to spot delivery being

desired by local buyers wherein the designated banks have an edge.

(Rs. In crores) YEARS 2003-04 2004-05 2005-06 TURNOVER 1065.13 1302.17 1784.36 NET PROFIT 0.64 1.3 1.52

Table no-2

During 2004-05, the Corporation achieved a turnover of Rs.1302.18 cr.,

22

against Rs. 1784.36 cr. in the corresponding period last year, showing a decline

of 27.0%.The turnover of the Corporation was adversely affected

a) In the core thrust area of exports -due to the closure of its Tokyo and

New York Offices. During 2003-04, the Corporation had been placed in the

Disinvestment mode .This resulted in some of the major buyers leaving the

fold of HHEC. The decline in jewelry sales was due to the change in

policy of the local Government.

b) In the opportunity driven business of Bullion Imports - due to bullion

imports being placed under OGL.

However, direct exports of crafts and textiles, which is the core business

of the Corporation; have increased from Rs.47.78 cr. in 2003-04 to Rs.49.82

cr. during the year, registering an increase of 4.25%.

Figure -1

EXPORTS

23

In the year 2005-06, direct exports amounted to Rs. 46.62 crores as against

Rs. 49.82 crores last year and indirect exports amounted to Rs. 12.02 crores

as against Rs. 28.36 crores last year.

The exports have declined from Rs. 78.18 crores in 2004-05 to Rs. 58.63

crores during the year showing a decline of 25%. The decline is mainly due to

Reduction in jewelry exports from Rs. 28.36 crores in 2004-05 to Rs.

12.02 crores during the year, having a decline of 57.6% because of the

postponement of the jewelry exhibition and

Reduction in direct exports from Rs. 49.82 crores in 2004-05 to Rs.

46.62 crores in 2005-06 because the major buyers of USA was shifting

their business to China and Pakistan due to competitive prices offered

by exporters from these countries.

(Rs. In crores)

YEARS 2001-02

2002-03

2003-04

2004-05

2005-06

EXPORTS 82.8 103.83 80.88 78.18

58.63

Table no.-3

The major portions of exports have come from the Handloom sector.

However, the Corporation is focusing on other segments as well.

24

Figure -2

IMPORTS

The Corporation mainly imports two products – Bullion Bars and Gold Coins.

The imports have declined from Rs. 1221.05 crores in 2004-05 to Rs. 1004.17

crores in 2005-06, showing a decline of 17.8%. Moreover, the retail sales

have also declined from Rs. 2.94 crores to Rs. 2.33 crores.

(Rs. in crores)

PRODUCTS 2005-06 2004-05BULLION BARS 1001.27 1221.03GOLD COINS 2.9 0.02     TOTAL IMPORT SALES 1004.17 1221.05

Figure-3

NET PROFIT

The performance of HHEC from 2001-02 to 2005-06 showed that the

Corporation has earned a highest profit of Rs. 301.21 lakhs in the year 2001-

02.

(Rs. In Lakhs)

YEARS2001-02

2002-03

2003-04

2004-05

2005-06

25

NET PROFIT 301.21 250.26 152.03 130.39 64.18

Table no.-5

Figure -4The Company earned the highest net profit in the year 2000-01 because the

sales were increased to a greater extent as compared to the cost. However,

the Net Profit of HHEC has declined from Rs. 130.39 lakhs in 2004-05 to Rs.

64.18 lakhs in 2005-06 which is mainly due to lower turnover and the high

costs.

To increase the Net Profit, the Corporation has already initiated a series of

activities to re- orient itself to improve performance by development of new

samples on traditional crafts and textiles and cutting costs.

Moreover, the Corporation should also focus on efficiency improvement of the

employees and adequate aggressive marketing policies should be adopted in

order to achieve a high turnover which ultimately will increase the net profit.

DIVIDEND

26

Dividends are declared by the Board of Directors on the basis of the net profit

in the current year. The company has started paying dividends to the

stockholders in the year 1997-98 when it earned a net profit of Rs. 204

crores.Though the Corporation has earned a net profit of Rs. 64.18 lakhs, the

Directors has recommended a dividend of 5% (previous year 5%) on the paid-

up Equity Share Capital of Rs. 13.82 crores.This will absorb Rs.69.1 lakhs

including dividend tax and surcharge thereon (Rs. 69.10 lakhs in the previous

year).

(Rs. In lakhs)

YEARS 2001-02

2002-03

2003-04

2004-05

2005-06

DIVIDEND 276.4 276.4 69.1 69.1 69.1

Table no.-6

Figure -5

Figure-5

27

GROSS SALES

During the year 2005-06, the corporation has achieved gross sales of Rs.

1065.13 crores as against Rs. 1302.17 crores in the previous year. The

following table shows the Gross Sales from the past five years.

(Rs. in Crores)

  2000-012001-02

2002-03

2003-04

2004-05

2005-06

EXPORTS 81.83 82.8 103.83 80.88 78.18 58.63IMPORTS 342.24 247.89 284.41 1701.01 1221.06 1004.17DOMESTIC 2 3.25 2.27 2.47 2.94 2.33

TOTAL 426.07 333.94 390.511784.3

61302.1

8 1065.13

Table no.-7

Figure -6

28

FINDINGS IN FINANCE DEPARTMENT

While working in the Finance Section of the Corporation, I found out

that the Corporation is doing well in general. This can be further

explained on the basis of the following ratios:

FINANCIAL ANALYSIS FOR HHEC ON THE BASIS OF RATIOS

RATIOS 2005 2006CURRENT RATIO 1.0247 1.189QUICK RATIO 1.0182 1.1425FIXED ASSETS TURNOVER RATIO

136.645

105.715

TOTAL ASSETS TURNOVER RATIO 1.28%

11.32%

TOTAL DEBTS TO TOTAL ASSETS 1.1061 0.1493PROFIT MARGIN ON SALES RATIO 0.4737 0.5606INVENTORY TURNOVER RATIO 201.43

328.926

CURRENT RATIO

Current ratio is calculated by dividing Current Assets by Current Liabilities.

The current ratio is more in the year 2006 as compared to 2005 because the

company has purchased a lot of inventories in 2006.High current ratio

indicates that the liquidity position of the company is very strong. The

Corporation continues to be adequately liquid and expects that this will help

them to achieve its growth objectives.

From the point of view of supplier, this is good for the company because the

greater the current ratio, the greater the company is in a position to pay off it

creditors. The Current ratio provides the best single indicator of the extent to

29

which the claims of short-term creditors are covered by assets that are

expected to be converted to cash fairly quickly.

Figure -7

QUICK RATIO

Quick ratio is calculated by deducting inventories from current assets and

then dividing the remainder by current liabilities. Inventories are typically the

least liquid of a firm’s current assets; hence they are the current assets on

which losses are most likely to occur in a bankruptcy. The company has a

high quick ratio as compared to the previous year. This is good for the

company because it means that the company can liquidate its inventory and

can pay off its current liabilities easily. The company is disposing off its

inventory efficiently.

30

Figure -8

FIXED ASSETS TURNOVER RATIO

The fixed assets turnover ratio measures how effectively the firm uses it

plants and equipments. HHEC has a fixed assets turnover ratio of 105.715 %

which means that the firm is not using its fixed assets as extensively as it

was using in the previous years. One possible reason for low fixed assets

turnover ratio is that the company has purchased a lot of fixed assets in this

year. Therefore, the company has to take appropriate necessary steps to

increase the fixed assets turnover ratio.

31

Figure -9

TOTAL ASSETS TURNOVER RATIO

The total assets turnover ratio measures the turnover of all the firm’s assets

and it is calculated by dividing sales by total assets. HHEC ratio is more than

the previous year which indicates that the company is generating a sufficient

volume of business given its total assets investment. This is actually good for

the company because the company has purchased a lot of fixed assets in the

current year and still, the company is generating a sufficient volume of

business.

Figure -10TOTAL DEBTS TO TOTAL ASSETS

The ratio of total debt to total assets, generally called as the debt ratio,

measures the percentage of funds provided by creditors. The debt ratio is

very low as compared to the previous year because the company has paid off

its debt Creditors prefer low debt ratio because the lower the debt ratio, the

greater the cushion against creditor’s losses in the event of liquidation. This

is actually good for the company because it can borrow additional funds

32

without raising its equity capital and creditors may be reluctant to lend the

firm more money.

Figure -11

PROFIT MARGIN ON SALES RATIO

The profit margin on sales ratio is calculated by dividing net income by sales.

HHEC profit margin is more than the previous year which means that the

company’s cost was not too high in relation to sales. This shows that the

company is operating efficiently and is utilizing the resources very well.

Moreover, the firm with a high profit margin might end up with a low rate of

return on its stockholder’s investment. Therefore, high profit margin is

actually good for the company.

Figure -12

33

INVENTORY TURNOVER RATIO

The inventory turnover ratio is calculated by sales divided by inventories. The

HHEC turnover ratio is more in the current year as compared to the previous

year which indicates that the company is disposing off it inventory very

effectively. Though the company has purchased inventory in 2006, still its

inventory turnover ratio is high which means that the company is not holding

too much inventory. Excess inventory is unproductive and it represents an

investment with a low or zero rate of return. This shows that the company

can easily liquidate its inventory and can pay off its creditors easily. This is

actually very good for the company.

Figure -13

Thus, on the basis of the above ratios, we can conclude that overall the

Corporation is doing well. However, there are some areas where the

Corporation should focus on and should take appropriate steps in order to

increase the total turnover and net profit.

34

S.W.O.T ANALYSIS

The Strengths, Weaknesses, Opportunities and Threats (S.W.O.T) of the

Corporations are as follows:

STRENGTHS AND WEAKNESSES

STRENGTHS

INFRASTRUCTURE

Six branches in India and 18

agents in foreign countries.

Offices and retail outlets at

premium locations in Delhi,

Mumbai, Chennai and Kolkatta.

Procurement centers all over

India.

TRADE RELATED SKILLS

Control over sampling,

competitive procurement,

production monitoring and

quality inspection in

handlooms through the

procurement centers.

Range of sample collections of

the past in handloom fabrics &

made-ups.

Control over manufacturing in

35

garments.

Over 45 years in the trade of

development & exports.

Customer base who have been

dealing for many years.

BRAND EQUITY

Brand name “Sona” –

registered in Italy & applied for

in India.

Glorious past – associated in

bringing names like Pashmina,

Carpets, Moradabad brass to

the world map.

WEAKNESSES

BUSINESS OBJECTIVE

Selectivity & focus is needed –

the focus attention continues

to be on “locations” rather

than “products / markets”

36

UNSKILLED MANPOWER

Lack of professionals in the

strategic areas of design

development, technical,

marketing and finance.

Motivation of staff – Revised

Performance Linked Reward

Scheme under implementation.

Need for rationalization of

manpower across its trade

activities through training &

redeployment.

LACK OF CONTROL OVER

MANUFACTURING

No direct control on

manufacturing in handicrafts.

Lack of built-up facilities for

manufacturing / finishing high

value items like made-ups,

fashion accessories etc.

OPPORTUNITIES AND THREATS

The various opportunities for H.H.E.C are as follows:

GLOBAL MARKET

Export markets are showing

signs of revival.

Quotas on textile items

dismantled w.e.f. 1.1.2005

37

thereby providing wide

opportunities for export of

textile and garments.

MANUFACTURING UNITS- GARMENTS

Setting up of a new unit at

Noida, to capitalize/ reverse

the decline in growth and tap

the opportunities available on

dismantling of quotas.

BUYING AGENTS

Appoint buying agents who

has the In-house skills to

perform in product lines like

Carpets, Jewelry & Furniture.

OPPORTUNITY DRIVEN BUSINESS

Sustain the opportunity

driven business available

under the EXIM Policy, viz.,

imports of bullion and exports

of jewelry.

THREATS

GLOBAL COMPETITION

Different countries are

positioning themselves in

specific product-lines and

38

imitate machine made

products of crafts.

INDUSTRY STRUCTURES

Competition from

manufacturer/ exporter who

have control over

manufacturing / finishing.

Competition from private

players who have a lean

structure and flexible policies.

MARKETING STRATEGY

The most important component for every organization is the marketing

strategy which may be defined as the pattern of plan that integrates an

organization’s major goals, policies and actions sequences into a cohesive

39

whole. A well formulated strategy helps to allocate the organization’s

resources into a unique and visible posture based on its relative internal and

core competencies.

The target market for HHEC are the group of people towards whom the

corporation intends to market its goods, services or ideas with a strategy

designed to satisfy their specific needs and preferences. The special

emphasis in its effort remains primarily on the development of strategies that

will best match the product offering to the needs of particular target

segments. An appropriate match between such offerings and needs is vital to

the firm’s success.

The Marketing Mix is the blending of four strategic elements – Product, Place,

Price and Promotion to satisfy chosen consumer segments. It is one of the

most fundamental concept associated with the marketing process and is well

understood by most modern marketers. A firms marketing effort must always

aims at providing customer satisfaction. If a firm offers the right product at

the right price, right place and with right promotion, then the marketing

programme is bound to be effective and successful. The firm must design an

effective coordination of these four basic elements keeping in mind its

available resources.

HHEC has been working since four decades to nurture and organize the

different schools of craftsmanship. It’s creations comes in ethnic vibrant

colors and has been expanding its resource base by connecting itself to more

and more artisans, weavers and master craftsmen in rural areas. It offers a

wide range of products like Wooden / Iron Furniture, Metal-Bronze, Iron,

Brass, Copper & Silver, Stone-Marble, Soap-Stone, Granite, Jewelry- Gold,

Silver & Costume, Paper Machie, Glassware, Leather Garments, Carpets, Rugs

and Durries.

MARKETING PROBLEM

40

In the marketing department, I found out that the major marketing

problem for the corporation is that it does not get enough buyers for

its products. HHEC act as a middleman between the manufacturers and the

buyers. They are treated as traders because they manufacture only

Garments. They do not manufacture the other products. As a result, the

buyers prefer manufacturers because of two reasons:

a) They can get the products at a cheaper price.

b) They can purchase in bulk and will be assured of its quality.

For these reasons, buyers travel to remote areas in search of manufacturers.

However, to solve this problem, HHEC has been making special efforts in

order to satisfy the buyer’s needs and demands.

MY RECOMMENDATIONS

Apart from this, I would like to recommend the Corporation to adopt

aggressive marketing strategies of market penetration. It should

Participate in leading fairs and exhibitions in India & abroad in order to

advertise, create new buyers and strengthen relationship with existing

buyers.

Organize “Stand Alone Exhibitions” and events abroad to promote

the HHEC’S product lines.

Generate tremendous demand, response and win confidence of foreign

buyers through its fairs and exhibitions abroad which will ultimately

provide a synergetic platform to various production houses to

showcases their masterpieces.

41

FINANCIAL PROBLEMS

The Handicrafts & Handlooms Exports Corporation of India Ltd. Is a Central

Public Sector Undertaking under the administrative control of the Ministry of

Textiles, Government of India. It does not have any financial problems as

such because all the funds are being generated by the Government of India.

However, for certain products, it takes orders from buyers and purchase

products from different manufacturers on either credit or consignment basis.

However, the pricing strategy of the Corporation is very significant. Pricing is

a very critical decision in every organization. After meeting all the costs

involved, the sales revenue generated must yield a surplus before there can

be profits. The sales revenue figures is however, materially affected by the

price charged. If the price is too high, the sales generated are likely to be low.

Therefore sound-pricing policies must be adopted to ensure that the

organization secures satisfactory profits. However, in pricing decisions,

economic concepts are useful. One has to consider various factors which

influence pricing apart from costs such as competitive environment and

governmental control where applicable.

The price of the product materially affects the demand for product planning.

For example, if the quality of the product is to be improved, this may be

possible only if the customers are willing to pay a higher price for it. While

setting the price, the organization keeps in mind the following points:

Objectives of the organization

Customer characteristics

Economic product characteristics

Competitive environment

Distribution channels

42

Cost of profitability

MY RECOMMENDATIONS

Since the entire funds are being generated by the Government of India, the

organization does not have any financial problem as such. However, based on

my findings, I would like to recommend the organization to bridge the

information gap between the buyers and sellers which will ultimately shift the

Corporation’s emphasis on profitability of operations. It should also

Have a positive approach to pricing and should make all possible

efforts to get orders

Adopt the marginal costing policy for pricing

43

SCENARIO ANALYSIS

The Scenario Analysis exhibits the Current position of the

Organization and tells us about the future goals of it. It also shows

how effectively and efficiently the Organization is moving towards its

goals.

Currently, the focus of the Corporation continues towards maintaining a

harmonious blending of its developmental role with commercial activities.

As in the past, the Corporation continues to play a vital role in the

promotion of Indian Handmade Textiles and Crafts including textiles based

crafts like fashion accessories.

As part of innovation and to provide inputs, training and marketing

support to artisans/weavers, the Corporation had undertaken the

following projects for development of silk and silk blended fabrics for

dress material and home furnishing

Development of craft clusters at Saunsar (Chindwara, M.P.) and

Baraseoni (Balaghat, M.P.).

Development of the craft cluster at Sonepur and Bhubaneshwar

(Orissa), for the development of Tie & Dye Ikat fabrics in designs

acceptable to the international market, thus moving away from the

traditional Iket motifs.

Development of the craft cluster of Vanya Silk and Bivoltine Silk in

Uttaranchal.

With a view to marketing of new samples developed on traditional crafts and

textiles and its policy of upgrading knowledge on designs and fashions

abroad, the Corporation participated in a number of International fairs,

viz.., Heim- Textile (Frankfurt- Germany), Indian Home Furnishing Fair

(Osaka, Japan), India Garment Fair (Osaka- Japan), Formland Fair (Denmark),

44

International Autumn Fair (Birmingham) and India Trade Fair (Mauritius). The

Corporation has participated in domestic fairs like Textile India, IHGF, India

Pavilion at Aichi (Japan) and displayed jewelry, handmade crafts and textile

items. The Corporation also organized a “Stand Alone Exhibition” at Sydney

(Australia) wherein wooden crafts and furniture, carpets etc. were displayed.

Moreover, the Corporation has been practicing the principle of good

corporate governance and focusing on in the future also. The Board lays

strong emphasis on transparency, accountability and integrity. The Vigilance

Division also continued to perform the function of creating consciousness of

the Vigilance requirements among the employees. During the year, the

corporation observed Vigilance Awareness Week from 1st November to 6th

November 2006 and conducted seminars to highlight the harmful effect of

corporation.

The Corporation has also focused on the Personnel and Industrial Relations.

With a strong commitment to the organization and willingness to work whole-

heartedly towards achievements of the goals, the HHEC team has played a

pivotal role in its success. The Directors wishes to place on record its

appreciation to the contribution made by all employees in achieving the

performance during the year.

The Industrial as well as employee relations during the period under review

continued to be peaceful and harmonious. The Corporation lay due emphasis

on all round development of the human resource through training, re-

deployment and motivation. There was no employee of the company who

received remuneration in excess of the limits. The Corporation also follows

the Government directives relating to reservation of posts for the Scheduled

Castes, Scheduled Tribes and other Backward Classes. As per the latest

orders, the Corporation maintains the post-based roasters. During the year,

any post meant for these categories has not been de-reserved. Moreover, the

Corporation still continued to promote progressive use of the official language

45

“Hindi” for official work and to ensure implementation of the official

language. In order to motivate the employees to use “Hindi” in official work,

various incentives in cash and kind are granted. The Corporation organized

City level “Chitra Abhivyakti Hindi Competition” on 26th October 2006 under

the banner of NARAKAS. The competitors from twenty five Public Sectors

participated in the event. The Corporation was also awarded “shield” as

organizer Corporation. The Corporation observed “Hindi Pakhwara”to

encourage the use of Hindi by every employee in the day-to-day working of

the Corporation.

PERSPECTIVE PLANNING

HHEC is a Government based organization whose main aim is to market the

products of Indian Crafts and skills abroad which ultimately provides the

marketing channel for craftsmen and artisans. In order to fulfill its aim, they

are planning to take the following steps:

In order to increase the Exports of Handicrafts and Handlooms

products, the Corporation has been making efforts to rein in new

buyers from the existing markets as well as from the untapped

markets. Besides participation in major international and local fairs,

the Corporation has also proposed to organize “Stand Alone Exhibition”

in USA, Kuwait and Brussels.

With a view to provide design inputs, training and marketing support to

artisans, the Corporation has proposed to undertake projects on

Design and Development of cane and bamboo from North East and

ornamental crafts including jewelry items from North East.

After the closure of New York and Tokyo offices, in order to retain their

presence in these markets and further development of business in

46

other potential areas, General Sales Agent have been engaged during

the year for USA, Japan, Germany and Canada markets.

The Corporation has also proposed to set up a manufacturing unit at

Noida complex with CAD/CAM facility in order to focus on hi-fashion

garments, fashion accessories and made-ups developed through free

lancer designers for value turnover.

During the year, the Noida complex was inaugurated in order to affect

economies on the operational activities, marketing division of

corporate office including the Showroom and Delhi branch have been

merged and started functioning from the Noida complex.

Apart from the following steps, since, imports accounts for the majority of the

total income, the corporation is emphasizing more on the major segments

like Handicrafts, Handlooms, Garments and Jewelry. The basic strategy of the

corporation is to develop new and innovative products.

They have planned

To increase the contribution of Handicrafts in the total exports i.e. from

8.98 % to 10% by the year 2007-08.

To increase the contribution of Handlooms from 56.98% to 80% by the

year 2007-08.

To increase the contribution of Garments from 5 % to 7.3 %.

HANDICRAFTS SEGMENT

In order to increase the contribution of Handicrafts, the Corporation is

planning to

47

Enroll associates of Master artisans & Craft persons in order to develop

a new supplier base.

Establish warehouses in various foreign countries and to open up more

display showrooms in Noida in order to operate on consignment basis.

Concentrate more on the European, South East Asian, and Australian

markets.

Focus adequately on other growing categories like fashion accessories,

gifts and utilities, furniture etc.

HANDLOOM SEGMENT

In order to increase the contribution of Handlooms, the Corporation is

planning to

Diversify range in made-ups to enable focused marketing of table

linen, bed linen, floor coverings, etc.

Shift its focus from cotton fabrics for apparel end-use to designing

dress materials in silk, blends etc.

Utilize efficiently on the opportunity available on dismantling of quotas

by product development, cost, quality and time performance.

Diversify market coverage from USA, Japan and France to Germany,

U.K., Latin America and Australia.

GARMENTS SEGMENT

In order to increase the contribution of Garments in the total exports, the

Corporation is planning to

Explore the possibility of entering into a Joint-venture with a Foreign

Collaboration.

48

Focus mainly on simple garments like shirts, shorts etc. for volume

turnover.

Increase the focus on USA and Australian markets.

The Modern unit at Noida (U.P.) should focus primarily on Hi-fashion

garments for value turnover – selectively work with free-lancer

designers from India and abroad, collaboration with NIFT, etc.

JEWELRY SEGMENT

The Jewelry segment plays a vital role in the total turnover of the

Corporation. In order to increase its contribution, the Corporation is planning

to

Sustain the opportunity driven business of Jewelry Exports & Bullion

Imports.

CARPETS SEGMENT

The Carpet segment also plays a major role in the total turnover. In order to

increase its contribution, the Corporation is planning to

Sell the stock on consignment basis especially in the proposed

warehouses of U.S.A. / Canada & the display showroom located in

Noida.

Evolve its role in the carpets to that of buying agent over the next few

years.

The Corporation is also focusing on the other growing categories like fashion

accessories, Gifts and utilities etc. They are also planning to establish a

domestic warehouse at Noida and operate on consignment basis for retail

sales of items like furniture, carpets etc.

49

IDENTIFIED PROBLEMS OF RESEARCH

After studying the Corporation in detail, I identified two main

problematic areas

1) The National Museum Shop &

2) The Crafts Museum Shop

However, the HHEC Souvenir Shop acts as a major strength for them in order

to cover up these problems.

THE NATIONAL MUSEUM SHOP

50

The National Museum Shop in New Delhi is the largest museum in India. It

holds variety of articles from pre-historic era to modern works of art. It is run

by the Ministry of Culture, Government of India.

The National Museum displayed the excavations of the different

civilization.The museum has in its possession over 200,000 works of art, of

both Indian and foreign origin, covering more than 5,000 years of Indian

cultural heritage. Their rich holding of various creative traditions and

discipline represents a unity amidst diversity, an unmatched blend of the past

with the present and strong perspective for the future.

The HHEC Shop at National Museum is built in a very strategic and prominent

location. However, I found out these following problems.

a) The shop is in an ideal location but it is very poorly maintained. There

is dust on most of the displayed items.

b) Not only the shop is poorly maintained but it is also much suffocated.

There is no proper air ventilation as there is only one window and the

air conditioner is also not working properly.

c) The collection of books is very poorly displayed. No section has been

maintained for similar kinds of books due to which it becomes very

difficult for the buyers to find a book of their choice.

d) Apart from some handicrafts and handloom products, no other

segment products are displayed.

THE CRAFTS MUSEUM SHOP

The Crafts Museum complex is a charming oasis in the midst of the hustle

and bustle of Delhi. Mud huts with painted walls and thatched roofs,

51

courtyards, terracotta horses recreating village shrines, craftsmen at work

are some of the elements that add to the rural ambience of the place.

Within the museum itself are examples of traditional Indian crafts, Wooden

Carvings and Images, Metal ware etc. which includes clay and terracotta

pots, toys and images, folk and tribal paintings, jewelry and textiles. The core

collection of the Crafts Museum was actually put together to serve as

reference material for the craftsmen who were increasingly losing touch with

their own traditions in terms of materials, techniques, designs and aesthetics

of their arts and crafts due to the sudden changes caused by modern

industrialization. The Crafts Museum shop gives the craftsmen an opportunity

to confine to his tradition or to innovate in response to his new contemporary

environment.

Since the Crafts Museum shop is located in Pragati Maidan, it faces a lot of

problems which are as follows:

a) The majority of the sales take place only when there are some fairs.

During the rest of the period, the sales are very minimal.

b) The Crafts Museum shop is also poorly maintained. There is a lot of

dust on almost each and every item displayed.

c) The shop is very much suffocated as the air conditioners are not

functioning properly and the fans kept there does not solve the

problem of heat.

d) The product displayed does not include home furnishing, jewelry and

garments. The foreign customers specially ask for these products.

e) The products are not displayed in an efficient manner. There is no

sequence of products which leaves a bad impression on the buyer.

52

THE HHEC SOUVENIER SHOP

Situated in the heart of Delhi, the unique Dilli Haat is an upgraded version of

the traditional weekly market, offering a delightful amalgam of craft, food

and cultural activities. Spread over a spacious six acre area, imaginative

landscaping, creative planning, and the traditional village architectural style

have combined to produce the perfect ambience for a Haat.

Dilli Haat transports you to the magical world of Indian art and heritage

presented through a fascinating panorama of craft, cuisine and cultural

activities. It has a wide variety of skillfully crafted handicrafts intrinsic to each

part of the country. These range from intricate rosewood and sandalwood

carvings, embellished camel hide footwear, to sophisticated fabric and

drapery.

The Handicraft stalls are allotted on a rotational basis to craftsmen from all

corners of the vast and varied land of India. Shows promoting handicrafts and

handlooms are held at the exhibition hall in the complex.

The HHEC Souvenir shop at Dilli Haat is very ideal because the foreign

tourists visit these shops very often. The shop has a total turnover of Rs. 1.36

crores in the year 2006-07 as compared to Rs. 1.05 crores in the previous

year. While allowing free interaction between buyers and sellers, the

Corporation favors a check on prices regularly to keep them moderate. The

HHEC shop acts as a major strength to cover up the problems, however, it

also needs some modifications.

a) The HHEC shop at Dilli Haat is very small and the products are not well

displayed due to lack of space.

53

b) The shop requires at least one air conditioner to make the temperature

in side the shop comfortable.

CONCLUSION

Based on my internal scanning of the Corporation, I came to the

conclusion that for HHEC to become a successful organization, the

crafts should be re-developed with modern technology. Therefore,

following steps should be taken:

The Artisans should be taught modern techniques to produce their

products. With the introduction of improved labor saving techniques,

tools and appliances to them, they can have a high turnover.

The Indian craftsmen generally produce objects of traditional designs

but it should be re-designed or some changes should be brought in

order to compete with the machine made products which are

comparatively beautiful and less costly. A craft can only compete with

54

the machine made products in the international market if the designs

are improved. But the improvement in designs should be made without

sacrificing the traditional qualities and the artist standards of the raft

objects. The craftsmen should retain the old and blend it with new

things of their own invention.

The standard of living of the Craftsmen should be raised. Currently,

their earnings are not sufficient enough to provide them with the basic

requirements. They are mostly illiterate and live in unhealthy places.

To ensure a better deal from the craftsmen, the whole structure of

production has to be reorganized which will lessen the domination of

dealers, financers, and middle men.

The crafts of a country can flourish only when the raw materials used

by the craftsmen are available to him at reasonable and concessional

prices. Therefore, it is suggested that the distribution of the raw

materials should be done through the state governments. Special

efforts need to be made so that the raw materials are available to the

craftsmen on time.

The future of Indian Crafts depends on the popularization of craft

products among both the masses at the national and international

level. Therefore, more utility articles should be produced at a cheaper

rate. As a result, wider publicity should be done through newspapers

and journals. Apart from this, the Central and State Governments

should also take appropriate steps in arranging exhibitions and fairs.

Various promotional schemes should be developed in order to promote

the Indian Crafts. The Government should provide financial and

technical support to various institutions like The Handicrafts and

Handloom Export Corporation of India, The State Industries

55

Department etc. who are closely associated and concerned about the

functioning and development of crafts in different parts of the country.

The Corporation should also focus on an effective export programme.

For this purpose, proper advertisement is required and adequate funds

should be invested. Films on Indian Handicrafts should also be shown

in foreign countries. Moreover, the corporation should also develop

special products that really portray the cultural heritage of India.

For the development of crafts, the individual craftsmen should be

given better credit facilities. They should be allowed to avail loans from

various banks which help them for their working capital requirements.

The Corporation should focus on the re-orientation of the Craft

traditions. With the impact of modern civilization, significant changes

have taken place in the aesthetic value of the people. Majority of the

people does not want ornamented crafts. They require simple and well

designed objects of utility which are inexpensive and handy. To satisfy

the modern needs, the traditional designs should be improved. The

revival of these craft traditions should, however, be undertaken in the

light of modern requirements and taste. Moreover, the government

should patronize and give recognition to the skilled craftsmen who

have produced great works of art which will ultimately motivate them.

The Corporation should also focus on the appropriate marketing and

promotion of Exports. The rate of growth in the exports of craft

products is very significant as compared to the total exports of our

country. The share of exports of craft products in the total exports of

our country has also increased in the recent years and crafts have

become one of the important export items. For the promotion of

56

exports, the crafts goods should be marketed appropriately through

exhibitions, fairs and brochures.

Apart from re-designing and re-orientation of the Indian Crafts, special

concessions should be provided by the Government in the Handloom

and Handicrafts sector.

The Corporation should also take steps to provide better technical

guidance to craftsmen which will enable them to understand the finer

details of quality production, tools and technological infrastructure

which will help them in designing and processing of their products.

Lastly, the Corporation should re-formulate its policies keeping in mind

the current market situation.

RECOMMENDATIONS

Based on the detailed study about the Corporation, I would like to

recommend the following points which will benefit the organization:

1) The Corporation should Re-orient the policy of Procurement with the

main focus on source buying by establishing strong and direct links

with artisans and craft-persons.

57

2) The Corporation should avail up discount on price through prompt

payments.

3) They should also take steps to upgrade the existing website with latest

catalogue for advertisement and enquiry/order generation as this will

give adequate information to foreign buyers.

4) They should also focus on controlling and managing the cost of people

through re-structuring solution in order to achieve the industry norms.

5) Induction of officials in the key functional areas of design development

and marketing trade functions is also required. This will lead to better

and improved designs and effective trade between the manufacturer

and the organization.

6) They should re-organize the workforce through proper training and skill

based job allocation in order to make them more efficient.

7) They should also give ample opportunities to craftsmen and artisans so

that they can have greater exposure and should have the access to

national and international markets thereby giving them a better

livelihood for more sustainable developments.

8) They should appoint more buying agents who possess the in-house

skills in product lines such as Jewelry, Furniture and Carpets. Since, the

Corporation is planning to set up more showrooms; these buying

agents will prove very beneficial for them.

9) The Corporation can also have a Color Forecast link on its website

which provides the future design and color directions of fashion and

home furnishings for domestic and international markets. As a result,

58

small apparel and furnishing manufacturers, exporters, domestic

textile traders and producers will respond adequately and in a timely

fashion to market requirements.

10) They should also try to maintain and build good social relations

with the buyers as well as with the manufacturers of different

segments like handicrafts, handlooms, carpets, garments etc.

11) The Corporation should take possible steps to publicize its

products in the popular periodicals and magazines. This will leave an

impression on the mind of the customers who read them frequently.

This ultimately will increase the customer base for its products.

SPECIAL RECOMMENDATIONS

THE NATIONAL MUSEUM SHOP

1) The items should be displayed in such an attractive way that it should

catch the attention of the buyers at once.

2) The displayed items should be cleaned regularly and should not have

dust on it.

3) Proper air ventilation with adequate air conditioners and windows are

necessary to make the shop a comfortable place for buyers and foreign

tourists.

4) There should be products of other segments apart from only

Handicrafts and Handloom products. These include garments, home

furnishings and jewelry as these are in great demands by the foreign

tourists.

59

5) Different variety of Handicrafts and Handloom products should be

added to the collection.

6) Finally, the collection of books should be appropriately displayed.There

should be different sections for different kinds of books so that the

buyers can locate it easily.

THE CRAFTS MUSEUM SHOP

1) Firstly, the interiors of the shop should be highly appealing to the

customers. For this purpose, the exhibits should be displayed to attract

the attention of the customers.

2) The Crafts Museum Shop is very small. Therefore, its area should be

increased as it will give a new and pleasant look to the shop.

3) The displayed items should be cleaned regularly from time to time. It

leaves a very bad impression on the buyers if there is dust on

displayed items.

4) The problem of air conditioner should be immediately solved. Proper

air ventilation is required as the shop attracts a majority of foreign

tourists.

5) Finally, different section should be made for different products like

garments, home textile, home furnishings and jewelry.

THE SOUVENEIR SHOP AT DILLI HAAT

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1) The area of HHEC shop at Dilli Haat should be increased in order to

accommodate more customers and to display the products in an

effective way. The outlet should be spacious to move around freely.

2) The Dilli Haat shop of HHEC does not have the collection of books.

Books are always appreciated by the foreign customers and efforts

should be made to display the books.

3) The shop does not have proper air ventilation. The experience of

visiting HHEC shop at Dilli Haat should be a pleasant one but high

temperature inside the shop plays the opposite.For this purpose, the

problem of air conditioner should be immediately looked into.

4) Another way to increase the sales is by the hospitality of the staff

member present at the shop. For this purpose, adequate training from

time to time should be imparted to the staff members.

BIBLIOGRAPHY

WEBSITES

1) www.hhecworld.com ( March – 12,13,15,18,19,20,21 and April – 5, 12,13,18)

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2) www.ministryoftextiles.com ( March – 13,14,15 and April-7,8)

3) www.craftsinindia.com/arthistory ( March – 18,19,26,27 and April – 1,2,3,7,10)

4) www.crafts-wikipedia.com ( March – 18,19,20 and April – 3,4,5)

5) www.indianartsandcrafts.com ( March- 29,30 and April – 1,2,3,4,6,8)

6) www.google.com ( March – 15,16,17,18,20,22,24,25,26,29,30 and April- 4,5,9)

7) www.dillihaat-wikipedia.com ( April – 2,3)

8) www.nationalmuseumofindia.com ( April – 5)

9) www.craftsmuseum.com ( April – 7,8)

BOOKS

1) Annual Report 2005 -06

2) Annual Report 2004-05

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