SMALL SCALE INDUSTRIES AND SUSTAINABLE …internationalseminar.org/XVII_AIS/TS1_PDF/5.Bhawana...

XVII Annual International Seminar Proceedings; January, 2016

ISBN no. 978-81-923211-8-9 http://www.internationalseminar.in/XVII_AIS/INDEX.HTM Page 69

SMALL SCALE INDUSTRIES AND SUSTAINABLE DEVELOPMENT:

A CASE STUDY OF KALIMPONG

Bhawana Khati

Ph.D. scholar

CSRD(Centre for Study of Regional Development)

Jawaharlal Nehru University

New Delhi.

Abstract

The hilly regions are devoid of many development possibilities as compared to the plain

region. Geographical remoteness, non-availability of well-connected road network, lack of

resources and skills are some of the obstacles in the industrial development of the hill areas.

The geographical fragility is one of the major hindrances for the establishment of heavy

industries. This study is an attempt to highlight the potential of cottage industries in

Kalimpong sub-division which lies in the Darjeeling district of West Bengal. The study done

is empirical in nature, primarily based on field survey. This region is fragile not only in

ecological but as also in economic and political perspective. This study tries to explore the

potentiality of local small scale industries in addressing uncertainty and sustainable

development issues. It also aims to identify the role of the government in this region, in

implementing appropriate development policies. Other aspects relating to the workers and

challenges of the units are also included in the study.

Keywords: small-scale and cottage industries, hills, environment, sustainable development,

unemployment

Paper Type: This is a descriptive paper.

1. INTRODUCTION

India was an industrially advanced country with textile, calicous and metal wares but with the

coming of the British these industries were on the verge of extinction. Though the

government took active part in development of the small-scale industries during the 2nd

world War these industries got importance only after the conference on Industrial



Development held in Delhi in 1947.A cottage industries board was set up in 1947 itself. It

was split into three boards All India Handloom Board, All India Handicraft Board and All

India Khadi and Hand Village Industries Board. In addition to this there were three other

boards, Coir Board and Central Silk Board. The industrial policy resolution of 1948 stated

that cottage and small-scale industries have a very important role in the national economy

offering opportunities for individual, village or co-operative enterprise and means of

rehabilitation for displaced persons (Vijayarani 2011).

But this role of small-scale industry does not refer to all regions of the country. Though there

has been a growth in this sector but the pace of growth is not the same in all regions of the

country.It is also within a particular state some regions are more developed than the other.

There may be many factors for this. Some of these may be the variations in the climate, soil,

rainfall, altitudes, availability of water, high road densityetc.The states like Maharashtra,

Tamil Nadu, Karnataka, Goa, and Delhi are industrially developed. There is the existence of

large industries and services in these states. The states like Punjab and Haryana are also

developed due to flourishing agriculture whereas the state like Orissa, Bihar, Madhya

Pradesh, Rajasthan, Jharkhand, Chhattisgarh, Uttar Pradesh, West Bengal and the North

Eastern states are industrially and economically backward and has not performed

well(Thakur 2011).

In the North-Eastern States including Sikkim and Darjeeling due to its varied geographical

limitation, large industries are few in this region.This region has a very good capacity of

generating small-scale industries. So in order to fill this gap small-scale industries in the

regions where large industries are not possible, should be enhanced.

The small scale industries have been given an important place in India’s economic planning

for ideological and economic reasons.Our late Prime Minister Mrs. Indira Gandhi once

remarked. “Small scale industries offer many opportunities, besides adding to production,

they broaden the industrial base. They enable the process of modernization as well as

entrepreneurship to spread to more regions and layers of society” (Shinde 2015).

The significance of small-scaleindustryis also because, it provides

employmentopportunities,capital requirement is low, short gestation period,

promotesbalanced regional development, the entrepreneurial base is widely dispersed and

there is utilization of local resources with minimum harm to the environment. It can touch

upon the lives of the remotest and the most marginalized people in the region.



2. DEFINITIONS

To define small-scale industries is difficult as it varies from one country to country and

changes from time to time. There has been lot many changes in the definition of small scale

industries since its inception.The Fiscal Commission in 1950 for the first time defined small-

scale industry as an industry which is operated mainly with hired labour, usually 10 to 50.

At present the industries is defined according to the investment ceiling.The small scale

industry ispresently defined “as an industrial undertaking in which the investment in fixed

assets in plant and machinery whether held on ownership or on lease or by hire-purchase does

not exceed rupees one crore” (Hussain 2003).

Whereas the tiny units is definedas “a unit where the investment on plant or machinery does

not exceed Rs 25 lakhs, irrespective of location of the units”(Hussain 2003).

According the MSME Act 2006, the cottage industryis defined as “a unit where the family

members are involved in the managing of the unit and no labour is hired. There is negligible

capital investment and there is only hand production using theirown tools and

material”.However, the cottage industry is a part of the small scale industries. The diagram

below will make it clear the difference between small-scale and cottage industries.



Figure 1: Classification of small-scale industries

Source: Sharma, 2012.

The SSIs in India are broadly classified into two types, the Traditional industries and Modern

industries.Both the types of SSIs are prevalent in India. Traditional industry is one which is

craft based and passed on from one generation to another. These types of industry are

scattered, unorganized and run with a very little hired labour. The industries like Khadi,

Handlooms, Handicrafts, Coir, Silk and Wool are some of the traditional small-scale

industries. Modern small scale industry is neither traditional cottage industry nor large scale

industry but lies in between these two. This category of industry can produce on a scale larger

than that of a traditional small-scale industry due to the use of power driven technology. But

Power loom Small-scale

With

power

Without

power

Small Scale Industries

Traditional Modern

Khaadi

Village Industries

Handlooms

Coir industry

Sericulture

Cottage

Artisans

Export oriented

Ancillaries

Tiny enterprises

Small Scale Services

and business

enterprises



in terms of organizational feature such as having few self- employed persons it is closer to

cottage and village industries(Bhavani, 2009).

The definition of cottage and small scale industries are done according to certain criteria but

in practicality it is difficult to categorize the small scale and cottage industries. The industries

in Kalimpong are traditional industries expect few but though their size is small they are not

appropriate to be called cottage industries as they are run not only by family members but

also includes hired labourers. Anotherpoint is that the investment is not so big to separate it

from cottage industries. So the researcher has chosen the term small scale in this study as the

small scale industries include both traditional and modern industries as explained in the

above paragraph.

3. ADVANTAGES OF SMALL SCALE INDUSTRIES IN THE HILLY REGION

Small scale and cottage industries keeping in view the basic needs of the hill people and due

to its environment friendly nature will help in leading towards sustainable development in the

hills. Sustainable development simply implies the use of ecological system in a manner that

satisfies current needs without compromising the needs or options of future generations (The

World Commission 1987). These strategies should incorporate traditional knowledge and

established production systems after they have been carefully evaluated. The aim of

sustainable development should be to maximize human well-being or quality of life without

jeopardizing the life-support environment. The aim of sustainable development should be to

maximize human well-being or quality of life without jeopardizing the life-support

environment (Singh2006).

Firstly, looking at the geographical aspects of the region the growth of large industries is not

suitable for the hilly regions.Therefore small industries are best suited for this region. The

establishment of small scale or household industries can make an excellent substitute for the

heavy industries. This is the most environment friendly industry compared to all other

industries (Maithini 1992).

A study done by Hamid in the state of Jammu and Kashmir, states that in the region which is

not ideally suited for developing large scale industries, the only remedy would be the

establishment of small scale and cottage industries. It is most suited to the socio-economic

condition of the state.He identified the causes of industrial backwardness in Jammu and

Kashmir which included peculiar geographical location, limited resources, shortage of raw

materials, inadequate power supply, insufficient, poor technical know-how, absence of



entrepreneurial spirit among the local people, no role of potential investors and entrepreneurs

from outside the state and rare financial support. All these characteristics were also prevalent

in states like Mizoram and other hilly regions of India (Hamid1989).

Moreover the development of small scale industries can also curb employment problems in

the hilly region. A World Bank Study (1978) has shown that all important requirements of

more jobs and higher incomes are met by rural non-farm activities.The rural areas in hilly

regions of India are mostly agricultural regions. More than three-fourths of Uttarakhand’s

total population depends on agriculture for their livelihood and the economy.However, the

land holdings are small and fragmented, and irrigation facilities are also limited. The problem

of soil and water conservation is another issue. For physical, geographical and environmental

reasons, the scope for agricultural policies based on modern technologies is severely

constrained in the hill regions. As a result, the majority of the rural population in the hills

either survive on subsistence agriculture or migrate to other parts of the country for

employment.Infact the small-scale industries set up in these regions can uplift the rural

masses to a great extent through local employment and income generation(Mittal2008).

In India the Micro Small Enterprise Sector has the second largest share of employment after

agriculture including the small scale cottage industrial sector. Agro-food processing,

sericulture and other village enterprises have the potential of checking rural-urban

migration.The MSE can provide significant opportunities in North-East and hill states from

where out-migration to metropolitan cities is a common phenomenon(Bhatnagar 2008). In the

hills as men mostly migrate out for work, women are left behind. So it is important to

develop the entrepreneurial skills of women. In Uttarakhand HESCO is involved in many

activities involving village women to make them self-sustained and add to the family income.

They are financed by the project as well as by the WISE group (Women Initiation for Self

Employment that has been proposed by NABARD.They involve women in these activities

irrespective of their qualifications. Various activities that are undertaken to create livelihood

opportunities are fruit preservation, rural bakery, handicrafts, candle-making, bio-crafts,

hand-made paper, greeting cards, making dolls, cards, wall-hanging. etc. They are also

involved in making sweets from local crops, which are often sold at temples and other

religious places as Prasad (Mittal 2008). So the small scale industries can play an important

role in checking out-migration by creating employment opportunities up to the most

marginalised sections of the hill population.


ISBN no. 978-81-923211-8-9 http://www.internationalseminar.in/XVII_AIS/INDEX.HTM 5

The small scale sector can also be a medium to conserve the rich tradition and culture of the

region. It is the only sector through which the culture and tradition of a particular community

may be preserved.The traditional small scale industries produce traditional goods like, Khadi

and Handloom items, hats, boots, paintings, curioes,local food items.etc.This leads to the

preservation of the culture of a community.The handicraft items and the local food items are

very famous in Kalimpong. The traditional Naga shawls of Nagaland also symbolize the rich

heritage of the Naga people.These industries are the only medium to continue the production

of local goods.Though this sector is declining but the products of this sector is incomparable

to any foreign item. Therefore we must not let this sector die which not only helps in

enhancing the economy but also preserves our rich heritage and culture.

Therefore the small scale industries are very much needed in the economic and social

development of a region or a country as a whole especially in hilly regions where heavy

industries cannot be sustained and where there is heavy rate of unemployment. Mukherjee

1997, argues as this sector does not require heavy skill and knowledge, small scale sector can

be easily developed in economically backward district like Darjeeling. SSI helps in

maintaining ecology and environment by consuming less power and resources, thereby helps

in achieving sustainable economic growth.

Lying on the Northern part of the state of West Bengal, Darjeeling hills is prominent for tea,

timber and tourism. Even then, it gripped by its own socio-political and economic problems

which makes it the least economically developed districts in India. Unemployment is another

major issue of concern in Darjeeling hills.This region is excluded from the industrial map of

the country. Surely, the economic viability and environmental feasibility does not welcome

large industries. However, the small scale industries have great potentialities in the region

which have not been promoted as required (Khawas2002).

3. OBJECTIVE

Is to identify the existing small-scale industry and their potentiality and to understand their

problems and challenges in reference to environment and sustainable development. It also

attempts to put some suggestions for the growth of small scale industry in the hills.

4.DATABASE AND METHODOLOGY

The study done was empirical in nature, primarily based onfield survey.Data from10 different

small scale industries wascollected through interview method using closed



endedquestionnaire to analyse the number and characteristics of the industries. For financial

and marketing aspects,the shopkeepers in Kalimpong selling the products were interviewed.

All the existing industries were visited during the field work. The field work was done in the

year 2012 in the month of April.

The datahas been represented through simple frequency tables for the number of units, total

workers, male-female proportion and average. The total monthly expenditure and income of

the each unit had been calculated. The production and marketing information has also been

shown through simple tables.The Census Data of the year 1991 and 2001 has also been

referred to get information about the number of household workers in Kalimpong.

5. STUDY AREA

This study area focused is Darjeeling district in West Bengal with Kalimpong municipal area

as a case study. Kalimpong is one of the largest in area amongst the three sub-divisions in the

district. The average elevation of Kalimpong is 4100 sqft above sea-level. There are five

seasons are spring, autumn, winter and monsoon. The temperature in summer reaches a

maximum of 300 c and in winter it is about 15

0 c (Malley 2001).The total population of the

municipal area is 42998 according to census 2001.The percentage literate is 79% to the total

population. The total number of workers according to census 2001 is 13,382 that is 31% of

the total population. Within the workers the total cultivators are 69, total agro-labour are 129,

total household workers are 233 and others are 12,951 (Census abstract 2001).

6.OVERVIEW OF SMALL SCALE UNITS IN KALIMPONG FROM THE FIELD

The hilly area of the Darjeeling district, namely Kalimpong, Kurseong and Darjeeling is an

industrially backward area. Barring the tea industry, no other large industry worth mentioning

has come up in this region due to various factors like lack of infrastructure facilities and

inputs. The cottage industries in Kalimponginclude local paper making, lollipop1 making,

1 A local sweet made of milk and sugar in a shape of lollipop



noodle-making(Thukpas)2,fing

3 making, local incense sticks(bhotaydhoop)

4,khada

5making,

wood-carving,handlooms,handicrafts,paintings, wall-panels, Bhutia paintings, etc. Beautiful

curios6are made of copper plates studded with red and blue stones with engravings of replicas

of deities, wonderful thankas7 with paintings depicting the life of Lord Buddha are also

available. These industries thrived sustainably due to local initiative but of late, these

industries are declining and are on the verge of extinction due to many problems. Some raw

material based industries have been established in the region such as milk products, fruit

processing, hand-made paper, handicraftsetc. The hill area of Darjeeling provides a pollution

free and congenial atmosphere for the growth of small-scale industries.

The small-scale cottage industries in Kalimponghave a historical origin. These industries

mainly evolved during the time of the Britishers. But it has been predominantly influenced by

the Tibetan culture. This can be traced back to history when once Kalimpong was a trade-

outpost to Tibet. It served as an important trade route to Tibet via Jelep la Pass. After the

Anglo-Bhutan war Bhutan had to cede the territory east of river teesta to the East India

Company.Kalimpong was then a tiny hamlet.Subsequently after the war this region was

assigned to the sub-division of Western Doars.The next year it was merged with the

Darjeeling district.Kalimpong's proximity to the Nathu La and Jelep La passes offshoots of

the ancient Silk Road, was an added advantage and it soon became an important trading

outpost in the trade of furs, wools and food grains between India and Tibet (O’Malley 2001).

The increase in commerce attracted large numbers of migrants from Nepal, leading to an

increase in population and economic prosperity.In 1962, the permanent closure of the Jelepla

Pass after the Sino-Indian War disrupted trade between Tibet and India, and led to a

slowdown in Kalimpong's .With China's annexation of Tibet in 1959, many Buddhist monks

fled Tibet and established monasteries in Kalimpong. The large number of in-migration of

Tibetan in Kalimpong brought about the diffusion of culture amongst the people of

Kalimpong. One can observe the influence of Tibetan food habits like momos and

Thukpas.Infact most of the manufacturing industries existing in Kalimpong was established

2 A local noodle

3 A type of food item

4 A particular type of incense sticks made of pine tree leaves used specially by the Tibetan community.

5 A piece of cloth which symbolises honour and respect to the one you present. It is used in festivals and

important occasions. 6 Sea shells

7 religious poems



by the Tibetan people.So Tibetans had an important role to play in the evolution of these

cottage-industries (Ghatraj 2015)

The table below will give an account of the existing small scale industries in the town area of

Kalimpong since the beginning.

Table 1:The origin, type and number of small scale units in Kalimpong

Small Scale industries Origin Type Number of

units

1.Noodles Tibetan community Private 30

2.Dhoop/incense sticks Tibetan community Private 15

3.Fing Tibetan community Private 12

4.Khada Tibetan community Private 6

5.Lollipop Scottish Missionary Private 4

6.Bakery Muslim migrants Private 2

7.Wood-carving Chinese Private 2

8.Hand-made paper Nepal Private 2

9.Handicrafts Tibetan community Private 1

10.Handlooms KalimpongLoomless

Blanket Weaver’s

Society(1985-86)

State owned-District

Industries Centre

1

Source: Field work, Kalimpong, 2012

The Table 1, above gives an account of the data from the field of the number of units and the

workers. From the table above it can be noted that the noodle units are the highest as

compared to all other units. The reason for this may be that noodles serves as a prominent

food item in the region. It is followed by the local incense sticks which is also called the

bhotaydhoop. This is followed by fing which is also a food product made of “moong

da”8.Then is the khada,which is used in occasions like marriage, death ceremonies, and

religious ceremonies.etc. It mainly symbolises respect and dearness to the one presented to.

All the above four items were earlier used only by the Buddhist community. But nowadays

these items are also preferred by the other communities, leading to the rise in its demand and

production. Lollipop is another popular product of Kalimpong.

8A type of pulses.



The history of lollipop making in Kalimpong goes to Swiss father Andre Butty in 1950’s. He

opened the Swiss diary in 7th mile, Kalimpong. He has a very important role in uplifting the

local people of the village by giving them work in his diary. Many local people of the village

were employed in his farm. Not only lollipos but also other products like cheese were made.

But as time passed the diary could not run properly. Some say the reason for this as the

disloyalty of the workers. Fed up of the situation father Andre sold all the belongings of the

diary along with the cattles and returned back to his homeland. After father returned to

Switzerland some villagers carried on with the work of making lollipop by opening up their

own units (Pradhan 2004).

Amongst the all aboveunitsinKalimpongthe least number of units are of hand-made paper,

wood-carving, handicrafts and handloom. As Kalimpong comprises mostly of the Buddhist

people, it is influenced by the Buddhist culture.

6.1.THE COMPOSITION OF WORKERS AND THEIR WAGE STRUCTURE IN

THE SSI IN KALIMONG

Most of the workers in the small scale units in Kalimpong were the local people of the town

or those from the nearby villages. Both male and females were involved in this sector but the

proportion varied from one industry to another. The Table 2 below will give an idea about the

number of workers engaged in household industries in Kalimpong.

Table 2: Number of workers in Household industry in Kalimpong in different years

Household workers Year

1991 2001 2012

Total persons 298 233 413

Male 261 176 277

Female 37 57 136

Source: *The source for the census 1991 and 2001 is from the census Abstract and for the

year 2012 is from the field ** The above data includes only the municipal area of Kalimpong.

The table 2 above gives an account of the number of persons engaged in household industries

in Kalimpong in the three respective years. The total number of persons in the year 2001 has

declined but has again shown an increase in the year 2012.The household workers in the male

category is also showing the same pattern whereas in the number of female household



workers there is a consistent increase in the number since 1991 to 2012 and the increase from

2001 to 2012 is very high.

Table 3: Composition of workers in the SSI in Kalimpong in the year 2012

Name of the

product

Total

SSI

Total

number

of

workers

Average

workers

per unit

Male(%) Female(%) Average

monthly

income of

each

workerin Rs.

1.Noodle 30 115 4 93 7 2000

2.Local incense

sticks

15 48 3 90 10 3000

3.Fing 12 148 12 97 3 4000

4.Khada 6 45 8 0 100 1500

5.Lollipop 4 13 3 85 15 3000

6.Bakery 2 10 5 100 0 5000

7.Wood carving 2 4 2 100 0 1500

8.Hand Made

Paper

2 20 10 10 90 2500

9.Handicrafts 1 2 2 50 50 2000

10.Handloom 1 10 10 0 100 4000

Source: Field work, 2012

The Table 3,above gives in detail the total number of workers,average workers per unit and

the male-female composition in each unit in Kalimpong.

It can be noted that the number of units for noodles is the highest(30 unit) but the average

number of workers per unit is very low(4 workers),whereas the highest average workers per

unit is the highest forfing(12workers). The reason for this may also be the higher wage rate

offered in this industry as compared to noodles, despite the production process and the labour

work is similar in case of noodles and fing.

In case of handloom only one unit exists but the number of workers ishigh (10 workers).The

reason for this may be it is run as co-operative society by the state-government. In hand-made



paper unit also there is only two units but the average workers per unit is similar to the

handloom unit.

Regarding the male-female composition it can be noted that there is 100 per cent females in

handloom and Khada followed by hand-made paper unit. According to the respondents, the

reason for this may be because in these industries the production process is not so strenuous

and is easier for females to work as compared to other industry which requires hard labour.

Women can be encouraged more in this three sectors.

The shortage of labour is a major problem in almost all the industries, even though the

average number of workers in some units are preferential. The industries like noodle making,

fing, bakery requires a lot of labourers.

6.2. PRODUTION PROCESS OF EACH SSI

The process of production in each small scale industry in Kalimpong is very environment

friendly. The Table 4 below will give an idea of the production process in detail.

Table 4: Production process of the SSI in Kalimpong

SSI Raw materials Device/Apparatus required Process of Production

1.Noodle Flour,

egg(sometimes),

colour, water

A small machine for

doughing and then cutting the

noodles in long small bands.

Bamboo sticks for drying the

noodles

First the flour is made into a dough

then it is cut into very fine long hair

like shape. Then it is put into the

bamboo shafts and let dry in the

sun.

2.Local

incense

sticks

Pine leaves and

sunpati9leaves

A apparatus to grind the

leaves into paste and an

apparatus to bring the paste in

shape of sticks. A wooden

board to dry the leaves.

First the dry leaves are made into a

paste and made as a dough and then

is put to shape through a wooden

apparatus. Then it is put into

wooden boards and let to dry.

3.Fing Moong dal, water Big vessels, machine for

grinding the dal, and some

kitchen utensils.

The thick layer of dal water is made

and an the shape of the product is

given by some utensils having

9 A nepali term for a type of leaves



holes in it and then it is dried in the

sun putting it in bamboo shafts.

4.Khada Cloth, colour A printing board having

mantras and designs

imprinted.

The cloth is put into the wooden

board and pressed and then it is let

to dry in the sun

5.Lollipop Sugar, milk, fire-

wood

No machinery used. Big

vessels for mixture. It is

hand-made.

The mixture of milk and sugar is

boiled for almost 24 hours and

when the mixture gets thick it is

brought to shape by hand. And then

after drying it is ready for packing.

6.Bakery Flour, sugar, water, An owen and some

equipment to cut the bread

into shape.

All the work is done by hand from

douching to preparing breads.

7.Wood

carving

Wood, colour A machine having a blade

like thing to carve the wood.

It runs with electricity.

Wood is carved using a machine

and colours are added to the carved

wood having some designs.

8.Hand

Made

Paper

Daphney plant10

Vat, crusher, boards for

drying in the sun.

First the bark of the plant is cleaned

and boiled in a big vat, after boiling

it is bitten in the chopper and then it

is crushed and put in the board and

let to dry in the sun.

9.Handicra

fts

Cloth, fabric

paintings, threads,

needles

Sewing machine, Painting done on cloth, bags are

made by machine. etc.

10.Handlo

om

Wool, threads Loom It is done through three process,

shedding, picking and battening.


From the Table 4, it can be noted that the units using machinery are noodles, fing, local

incense sticks, wood-carving and handloom. According to the response from the owner of the

units, the power consumption is very low in these units. The frequent power cut poses lots of

10

A botanical name for a non-tree shrub found in the altitude between 2000 and 3000mts.The local name is

Argaylee.



problems for these industries even though the power consumption is significantly low. The

units not using power are bakery, lollipop and Khada.

Almost all the products except bakery require drying.Drying of the products is done through

sunlight. No artificial mode of drying is used.As there is the problem of water in Kalimpong,

water is recycled and used in industry like hand-made paper which requires a lot of water.

In the production process of lollipop making firewood is used for cooking the mixture as it

requires almost 24 hours to be cooked. Therefore gas cylinders are not affordable.But even

though firewood is used it does not add to environmental pollution as it is done in small-

scale. The producers even have to buy firewood by which the production costs goes up. So if

this be replaced through some new technologies this problem of firewood can be solved.

Regarding the waste products, there is no waste product from any unit which will have any

effect on the environment.All other units except Khada, Hand-made paper, Handicrafts and

Handloom all require less hard labour. Use of big utensils and handling them is required.

Therefore women should be encouraged in other units in management and packaging sectors.

6.3.INCOME AND EXPENITURE OF THE SSI IN KALIMPONG

All the small-scale units selected are facing problem regarding finance, which is main cause

for the dwindling of these industries. These entrepreneurs are unaware of the financial

schemes of the government. They financially depend upon themselves for carrying out the

business. They have not applied for any loan in the bank due to high interest rate

implemented by the bank or else the time taken by the bank to get the loan sanctioned is very

long. So the entrepreneurs depend upon themselves for finance.

From Table 5 it can be seen that highest investment per month is on fing as the price of

moong dal is very high, which is the main ingredient for making fing and the lowest

investment is on bakery as the size of the unit is small. Investment is incomplete without

production, therefore a glance on the production side of these units is a must.

Table 5: Average monthly income and expenditure of each unit

Name of the product Average monthly Average monthly



expenditure income

1. Noodles 40,000 50,000

2. Dhoop 15000 20,000

3. Fing 60000 65000

4. Khada 30000 40000

5. Lollipop 20000 25000

6. Bakery 8000 10000

7. Wood-carving 10000 12000

8. Hand-made paper 6000 8000

9. Handicrafts 10000 12000

10. Handloom 10000 15000

Source: field work, 2012

From Table 6, we cannot actually distinguish the highest producing unit as the products are

heterogeneous but we can have a vague idea of the average scale of production of each unit in

a month.

Table 6: Production per month in each unit in Kalimpong

Name of the product Average Production (per month)

1. Noodles 3500 kg

2. Dhoop 2500 packets

3. Fing 9000 packets

4. Khada 13000 mts

5. Lollipop 1200 packets

6. Bakery 2000 packets

7. Wood-carving 20 pieces

8. Handmade paper 500 items

9. Handicrafts 4300 pieces

10. Handloom 15 items

Source: field survey (2012)



9. LOCAL, NATIONAL AND INTERNATIONAL MARKET

The small scale industrial products are sold in the local market,supplied to various states in

the country and some products are also exported.

Table 7 shows that local handmade paper is supplied to Delhi and Bombay by the middlemen

and then it is supplied to the European countries.Due to the fact that this paper is eco-friendly

the demand from these countries is high.The local demand of this paper is only limited to

monasteries and temples.

Table 7: Local, National and International Market

SSI In Kalimpong Local National International

1. Noodles Kalimpong, Sikkim -

2.Inscense sticks Kalimpong, Sothern India, Ladakh,

Arunachal Pradesh and

Sikkim

-

3.Fing Kalimpong Ladakh, Mysore, Delhi,

Dehradun, Assam

Nepal and Bhutan

4.Khada Kalimpong - Nepal, Tibet,

Bhutan, America

and London

5.Lollipop Darjeeling,

Siliguri,Kalimpong

Sikkim -

6.Bakery Kalimpong, Melli(Sikkim) -

7.Wood-carving - Sikkim -

8.Handmade paper - Delhi and Bombay European

countries

9.Handicrafts Jholung(West Bengal) Sikkim U.S.A, U.K,

Taiwan, Nepal,

Bhutan

10. Handlooms Koochbehar,

Kolkata,Siliguri,

Rajganj

- -




Khadas are supplied to Nepal, Tibet, Bhutan and also overseas countries like America and

London, but these exports are not done directly from the factory but by the middle-men who

buy these khadas from these factories in lower rate and export it in higher prices. So it is the

middle-men who benefit the most.

Noodles is also supplied only locally.This product has a good local demand.The product used

to be supplied to Sikkim and Darjeeling but now it has stopped as these units have also been

set up in these areas.The demand of this product is slowly declining as people are opting for

other types of noodles which may be easy to prepare in few time.

Once this region was the only producer and supplier of lollipops,this product was supplied to

local as well as to other places like Sikkim,Darjeeling and Siliguri.But the situation is not the

same now.This product only fetches local market.The reason for the decline in the supply

market is the growing number of units in other areas and the inadequacy to compete with the

other units.The reason for the incompetence is many which will be later discussed.

The product fing fetches national well as international market.The middlemen are engaged in

the supply of the product.It is supplied to places like Ladakh,Mysore,Delhi,Dehradun,Assam

and outside India it is exported to Nepal and Bhutan.But the supplies are declining slowly as

the fing units have also been set up in the areas of demand.

The items from handicrafts is supplied locally within the town and to places like Sikkim and

Jholung(West Bengal).Internationally it is demanded from U.S.A,U.K,Taiwan,Nepal and

Bhutan.The demand from these counties is from the people of Kalimpong itself who are

residing in these respective countries.

Incense sticks are supplied to places in India mainly in the South India,Ladakh,Arunachal

Pradesh and Sikkim.Internationally it is supplied to Bhutan.The demand in local market is

from the monasteries and the Buddhist people.

These food products from bakery are supplied in local market and also supplied to places like

Melli and Algarah.As this product does not stand long days it is supplied to places within

short distances.

The Handloom sector does not have a fixed place of demand as the items made in this unit is

taken to places like Koochbehar,Kolkata,Siliguri and Raiganj during the exhibitions as by the



instruction of the District Industries Centre.But these items are mostly demanded by the

Bengali people.There is no supply of these items in local market as the local people as more

inclined to fashion and style.

The main place of supply of wood carving is in the state of State of Sikkim.Theproduct also

fetches local market but the demand in the local market is very less. These products are

fetching local, national and international market.But the demands from these places are

slowly declining due to many factors.

10. PROBLEMS, CHALLENGES AND SOME RECOMMENDATIONS OF THE

SMALL INDUSTRIAL UNITS IN KALIMPONG.

Kalimpong is very well known for these cottage industries from time immemorial but these

industries which also signify our culture is now facing a lot of problems and challenges in

recent times.The basic challenges this industry faces is the lack of infrastructure,lack of man-

power,lack of advertisement,the lack of support by the government and the effect of

globalization.

1.The frequent power cuts in the area is a major hurdle for these cottage industries as some

industries are dependent on power for production like noodles,wood-carving and fing units.

Therefore alternative sources of energy like solar and wind can be developed.

2.Preference for modern items by the local people has led to decline in the demand of

traditional goods.The handloom and handicrafts sector lacks the support of local people.As

the local people are mostly inclined to modern dresses and modern decorating items,they

hardly buy the traditional items. The handmade paper which holds very less importance in

Kalimpong is supplied to the European countries by the middlemen in Delhi and Bombay at

double rate than supplied from Kalimpong.Therefore if the local people would have known

its value, the production and supply would be better.The preference for packaged noodles

from countries like Nepal,Bhutan and China has also led to the decline of the product in local

market.

3.The dependency on weather is the main problem of these units which has led to the slow

production of the units.The production of the items like fing,noodles,incensesticks,khada and

paper has to depend upon the sun for the drying of theproduct.No artificial source of drying is

used.Therefore during rainy or during severe winter months there is negligible production of

these items.



4.Shortage of man-power is also a problem in almost all the units.The reason may be due to

the strenuous work and low wage rate to the workers and large scale out-migration of local

youths for better jobs.The educated youths are more in number in Kalimpongwith a literacy

rate of 79% (Census 2001),which does not allow them to work as labourers in those units.

But even the uneducated youths don’t prefer this job rather they prefer to do other works like

driving or working as salesmen.etc or prefer to migrate out.

5.Even though the literacy rate is high but there exists enormous number of school dropouts

and unemployment in the hilly region especially in the villages. The revival of the small scale

industries can be major steps towards this. This can be done only through the support and

encouragement from the side of the government, NGO’s and the Self-Help Groups.The

school going students can also be encouraged like in Himachal Pradesh for gainful

employment the state has ensured business studies and Entrepreneurship from class 9th

onwards.

6.The rising competition in Local,National and International Market is slowly leading to the

decline of these units.The products like incense sticks which earlier had its production only in

Kalimpong,is now produced also in South India,Ladakh,Nepal and Bhutan. The local people

also do not prefer the handmade incenses sticks due to the availability of other packaged

sticks having various fragrances.Due to this the supply has come down along with it, it is

facing very hard to stand out in the local market.

7. Similar condition is faced by all the units.The supply of cheap lollipops from Siliguri has

led to decline in the demand of the products in Kalimpong. The coming up of other types of

noodles from countries like Nepal,Bhutan and China is leading to the decline in demand of

this traditional product.The lack of advertisement and the lack of finances in this sector has

left this sector far behind in this present day of globalization.These units are finding it hard to

compete with the products from these countries.

8.Poor quality of raw materials and unavailability of resources is also a problem in some

units.The production of lollipops requires very good quality of milk and firewood is also

required in large amount.But as the quality of milk is getting degraded day by day the

entrepreneurs are facing a lot of problems in making quality product.As the product during

processing requires lot of stirring for about 12 hours,firewood is the best. But it is very

difficult to get firewood and is very costly which adds up to the production cost.If this



condition continues to prevail, the good old lollipops will be just a story to our kids in future

generation.

9. Water is a very important resource required for all units.But the shortage of water which is

a huge problem in this region is affecting all units.The units like paper,noodles, fing,

etc.requires a lot of water but this problem of water shortage is affecting the production of

these units.

10. Another problem is the problem in marketing and advertising. The most affected unit in

this regard is the handloom and the handicrafts sector.The potentiality of this sector is great

but the lack of advertising and marketing in the local market by the government is leading to

its decline.The local people are unaware of the potentialities of this sector. Very few people

in the town know about the existence of the Handloom,Handicrafts and even the paper

industry.So these factors is leading to the stagnation or very slow growth of these units as

there is no demand of these products in local market.

11.Most of the SSI’s in Kalimpong at present is traditional and is mostly influenced from the

Tibetan community. Later the Nepali community started getting involved but now even the

non-Nepalese like the Marwari’s and the Bihari’s have started getting involved in this

business. They are mostly involved in marketing of the products. They are the financially

well-off sections in the hills and has a good entrepreneur skills. As marketing of these

productsrequires both they are now overshadowing the market.They buy the products in low

cost from those units and sell it at higher price and supply to other parts of the country. So

they are benefitting the most whereas the marginalised are not getting an opportunity to grow.

Therefore the government should take some steps to encourage the entrepreneur skills and

give financial support to those communities who are engaged in it from the beginning.

12.The government is very reluctant and has not taken any heed to this sector. Each of the

DICs has been entrusted with the responsibility of preparing an 'action plan' for the district

for which outlines have been provided. Moreover, the DICs are also assigned the role of

reconstruction of sick and afflicted units.But the DIC's are not working as assigned the

responsibility. Certain schemes have been introduced by the government,which the local

entrepreneurs should avail from the DIC but there is no relation between the local people and

the DICs.The people are not made aware of the schemes provided by the government.The

DIC in most cases had become only an information centre and has not achieved its objective

of providing a complete package of services to entrepreneurs from one office. The hill areas



of the state are very much neglected by the government.There are very few schemes to avail

by the entrepreneurs.The entrepreneurs are not provided any incentives by the government

and don’t get a good market place for their handmade products. The SIDBI (Small Industries

Development Bank of India) in Uttarakhand has provided assistance to small units through

NGO’s. SIDBI has identified Micro Financing Institutes (MFIs) through which they are

trying to establish small and cottage industries (Mittal 2008). Deficiency of capital is one of

the major problems of the small scale units in Kalimpong.

12.CONCLUSION

From the above detailed description of each cottage industry in Kalimpong it can be attained

that these industries are environment friendly and has a lot of potential. All the industries do

not consume heavy power. The local hand-made paper, noodles, fing, handloom and wood-

carving industry require power for its production. Even though, they consume very less

power and also depend upon other source of energy that is sunlight for drying the products.

Other industries like khada, incense sticks, handicrafts also depends upon sunlight for drying

the products. The other industry like bakery and lollipop depend upon firewood for its

production.

All the cottage industries in Kalimpongrequires a lot of labourers but the main problem here

is the shortage of manpower. The wage rate of the labourers is also very low, though the

work requires a lot of effort. If the wage rate increased and the sector developed well it can

attract a lot of people. This will also help in curbing the problem of unemployment in the

region.

As all the industries from noodles to handloom is not at all harmful to the environment. There

are no waste products in all the industries mentioned above. This way this industries need to

flourish in this region with great importance.These industries have been in existence since

time immemorial. Therefore it should be made to be flourished as it also adds to the cultural

heritage of the region.

But it is the most vulnerable of all type of business as a result it faces several challenges and

problems. The government intervention is also very poor in this region. The development of

small scale industries will not only help in bringing environmental sustainability but also help

in sustaining livelihoods from declining. The small scale sector should be a matter of concern

for policy makers, researchers and for national and international agencies.



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