In this article we will discuss about:- 1. Introduction to Cottage and Small Scale Industries 2. Characteristics of Cottage and Small Scale Industries 3. Genesis of the Development 4. Importance 5. Classification 6. Role 7. Problems.
Introduction to Cottage and Small Scale Industries:
According to the Fiscal Commission, 1945-50, the cottage industry is “one which is carried on wholly or primarily with the help of the members of the family either as a whole or a part-time occupation.” While a small-scale industry is “one which is operated mainly with hired labour, usually with 10 to 50 hands and not carried on in the cottage of the worker as the resources of the produce are limited. It included all units or establishments having a capital investment of less than Rs. 7.50 lakhs.”
The Commission further observed that “cottage industries are associated with agriculture and provide part- time occupation in rural areas, small-scale industries generally provide whole-time occupation to their workers and are located in urban or suburban areas. No definition, however, can avoid overlapping and afford a clear line of demarcation between cottage and small-scale industries.”
Small scale industries were redefined in 1980 to include those manufacturing and repairing units as have investment in plant and machinery upto Rs. 20 lakhs and in case of ancillary units upto 25 lakhs.
The Cottage village and small industries sector consists broadly of:
(i) Traditional cottage and household industries (viz, handloom, khadi and village industries, handicrafts, sericulture and coir industry), and
(ii) Modern small scale industries.
The term ‘cottage industry’ and ‘small-scale industry’ has been variously defined by different Committees and Commissions like the Industrial Commission, the U.P. Industries Organisation Committee, the Royal Commission on Agriculture, the Central Banking Enquiry Committee, the Bombay Economic and Industrial Survey Committee and the National Planning Committee.
With this as the upper limit the village and small scale sector consists broadly of:
(i) Traditional industries (viz. handlooms, khadi and village industries, sericulture handicrafts and coir), and
(ii) Modern small scale industries including tiny units and power looms.
Traditional industries are generally artisan based mostly in rural and semi-urban areas, involve lower level of investment in machinery and provide largely part-time employment. Modern small scale industries and powerlooms use mostly power operated appliances and machinery and have some technological sophistication and are generally located close to or in the urban areas.
The definition of Small Scale Industries Sector was changed in 1985 and again in 1990 and 1997. The investment limit has been raised to Rs. 1.00 crores for small scale units as well as for ancillary units. Similarly, the investment limit for tiny sector has been raised to 25 lakhs since 1997.
Definition of Micro and Small Enterprises by MSMED Act, 2006:
There is no globally accepted definition of MSMEs. Different countries use different criterion; most of the definitions are based on investment ceiling and number of people employed. In India, the Micro, Small, and Medium Enterprises Development (MSMED) Act 2006 defines MSMEs. It introduces the concept of ‘enterprise’ as opposed to the earlier concept of industry.
According to the Act, MSMEs are classified into the following:
(i) Enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation Act, 1951), and
(ii) Enterprises engaged in providing or rendering services.
The Act defines the MSMEs in both these sectors:
Characteristics of Cottage and Small Scale Industries:
Following are the chief characteristics of the cottage or “household industries”:
(1) Such industries are decentralized and scattered over the whole country and carried on by different castes.
(2) They are carried on by handicraftsmen in their own homes, on their own risk, and for their own benefit.
(3) They are carried on either with the help of members of the family or with hired labour whose number does not usually exceed 10.
(4) Normally the amount of capital invested is small (i.e., not more than Rs. 5,000).
(5) The necessary skill for carrying on the crafts is handed down from father to son or from the master to the apprentice.
(6) The raw material is usually available near at hand while the tools needed are very few and simple and in most cases are manufactured locally.
(7) Hand-power is mostly used. In some cases machine-power is used on small-scale with no division of labour.
(8) The largest section of the cottage industry thrives on the local market, though some of them cater now to the needs of the foreign markets.
(9) They absorb only a part of the time of the worker.
Such industries are organised by individuals with private resources and with the help of members of the household and are pursued as full-time or part-time occupation.
On the other hand, the characteristics of small-scale industries are:
(1) They are localised in urban and semi-urban areas.
(2) They use machines, power and modern production technique.
(3) Their capital investment is not more than Rs. 10 lakhs, irrespective of the number of persons employed. The capital investment means investment on fixed assets like land, building, machinery and equipment. Where units are functioning in rented premises, the capital valuation of such building is taken into account in assessing the prescribed limit of Rs. 10 lakhs. When calculating the value of machinery and equipment the original price paid by the owner is taken into account.
(4) They are run by small entrepreneurs, or self-supporting workers and sometimes by co-operatives.
(5) They employ labour on wages and use the capital of other people.
(6) They produce goods for expanded markets.
(7) They work on a permanent basis.
It will thus, be observed that whereas cottage industries use traditional methods of making traditional products and are mostly located in villages and are run as “household enterprises”, deriving their raw materials from local sources and selling their produce in the local markets. They are, in sum, small scale, rural localised and technically backward.
On the other hand, small-scale enterprises are modern small firms in engineering and clinical industries employing modern techniques to produce modern products and art generally located in towns or semi-urban areas, employing hired labour and using such raw materials as often come from long distances and their products are marketed over large areas.
Thus, the border line between small scale and cottage industries rests on the mechanical (or manual) processes and the range of geographical coverage for deriving inputs and selling their output. The outstanding feature of these two types of industries is the personal character of its organisation and management in respect to the predominantly impersonal management of large scale industries.
Genesis of the Development of Cottage and Small Scale Industries:
Gandhiji has said that, “the salvation of India lies in the development and resuscitation of the cottage industries”.
In modern times, these industries have assumed even greater importance, and, therefore, need development on the following grounds:
1. Capital Starvation for Large Scale Industries:
India is a capital-starved country. It cannot afford large scale industries which involve great investment outlays. In this connection village and small scale industries offer a solution for the creation of large-scale employment at a cost which the country can afford.
It may be pointed out that the cost per person self-employment is on an average Rs. 1,000. In the small scale sector it varies from Rs. 5,000 to Rs. 8,000 per person. The cost per person employed in machine tools industry is about Rs. 25,000 ; in fertilizers it is Rs. 40,000 ; in heavy electrical, Rs. 50,000 ; in coal mining Rs. 60,000 ; in heavy machine building plant and foundry/forge plant each Rs. 100,000 ; and in iron and steel industry it is Rs. 1,60.000.
As the average per capital income is Rs. 348 per year, it requires more than 25,000 persons to about Rs. 1.00 Cr. per year and all this is needed to employ about 100 persons. Out employment must, therefore, be on a scale which can afford employment to agro-based industries in the rural sector.
2. Serious Unemployment and Underemployment:
Agriculture is the mainstay for more than 70 per cent of her people. Yet it has by and large, been a Cinderella of economic planning. Factors like high pressure of population on land, fragmentation of holdings, illiteracy and rural indebtedness, typical pattern of the village life, acute unemployment and vast underemployment (seasonal as well as permanent) etc., have almost paralysed the rural economy.
According to an NSS Report there were nearly 48 m. persons who worked with less than full intensity and about 19.54 m. who worked with intensity of a quarter or less of their full working time in 1955-56. Today the position is worse. It has been estimated that the number of underemployed working at half or less than a quarter of their normal time is about 50 millions.
At least 30 per cent of able-bodied men in our villages are underemployed. Apart from total unemployment a very large segment of the population of rural India is thus under-employed. Therefore, the rural population requires a second string to their bow in the form of cottage industries in addition to agriculture as its main occupation.
3. Poverty of the Rural Masses:
Rural areas are characterised by the poverty of its people, a wide gap between a developed and an undeveloped area, and a rapidly rising population; and low standard of living. The study of the National Council of Applied Economic Research on economic inequalities and concentration of weal ill reveals that 1 per cent of the population continued to enjoy 9 per cent of the national income; while 5 per cent of the people belonging to the lowest ladder having nothing to claim. The consumption standards of 60 per cent of our people are below the national average.
The per capita consumption standard of 30 per cent of the people are below Rs. 15 per month and that of 20 per cent are even less than Rs. 12 per month. Detailed calculations of the statistical data reveal that monthly average income per head in the lowest decile is Rs. 6.60 per month, or 32 paise per day; in the second decile Rs. 9.60 per month, and in the third decile Rs. 11.70 per month, in the fourth decile Rs. 13.36; in the fifth decile Rs. 17.34 and in the sixth decile Rs. 21.50 per month.
Thus, poverty can be done away with, in course of time, through the development of village industries.
4. Heavy Rural Exodus Resulting in Stagnation in Rural Areas:
India is passing through an economic phase in which there are excessive ruralisation and deindustraliation…. or there are excessive urbanization and decline of village community. Such a phase of economic transition from rural community to urban community as reflected through the movement of labour from agriculture has become a general phenomenon.
“If people are asked to explain why they left agriculture, they usually give a variety of reasons, the reasons actually given include better pay, shorter hours of work, better educational and transport facilities, mechanisation, the impossibility of supporting a family on a very small holding, the difficulty of rising in the social scales or of gaining access to ownership, or simply the shortage of rural housing.”
The rush to cities from the countryside reduces agricultural output and leads to economic stagnation in the rural areas. In towns it floods the labour market, depresses wages, increases the number of unemployed and leads to varied problems. Unchecked, these movements could lead…. to “unhealthy and problem-oriented urban development and stagnant self-retarding rural development.”
Therefore, the rural sector, a source of migration and an under-privileged section of the economy needs to be revitalised through a structural change without affecting much the social mobility of rural working labour force. The villages have to take on a new look and open up new vistas of development if the rural labour force is in space to remain where rural industrialisation is considered as a sort of offshoot of this revitalisation programme.
5. They are Suited to the Villages:
Machinery displaces human labour and a large scale mechanisation and industrial economy, in the present conditions, would definitely aggravate the already serious unemployment situation in the rural areas. Besides this, consideration of resources, power and organisational talent definitely circumscribes the scope of the development of large industries in the country.
The rural industries may further have access to raw materials or market, thus effecting savings in the transportation and distribution charges. They may also secure cheap labour and these factors will offset the advantages of large scale economies of big industries, resulting even in lower unit cost. Besides, they involve minimum disturbances, in the traditional set-up of the people, by providing employment in places of residence.
That is why rural small scale industries still had their own everywhere. Even in USA small units make up 92 per cent of the establishments, employ 45 per cent of the country’s workers and handle 29 per cent of the volume of business in the country. Sericulture, silviculture and viticulture in France- dairying in Denmark; toy making, lace and embroidery works in Italy and Holland ; cocoon rearing and poultry farming in Japan and watch and instrument making in Switzerland have contributed to rural prosperity in these countries.
There is no reason why India should not also develop these industries in the rural areas with the help of provision of cheap power and technology, and good transport system. The Fiscal Commission has rightly said that. “It is the relative strength of modernised cottage and small-scale industries that account for the large place that these occupy in the economy of even such industrially advanced countries of the world as U.S.A., U.K., Germany and Japan.”
6. Unsound Agricultural Economy:
Our income from agriculture is still far behind the performance of other developing countries. For instance, India has 0.35 hectares of arable land per person while national income in U.S. dollars per hectare of arable land is only 90.23. Compared with Pakistan, the corresponding figures are 0.26 hectares and 164.02 U.S. dollars; for Ceylon 0.15 hectares and $ 416.73; for Israel, 0.17 hectares and $ 562.50; amount per person is quite insignificant to enable him to make both ends meet unless there is some other subsidiary occupation to fall back upon for spare time. Village industries thus provide the best solution.
Importance of Cottage and Small Scale Industries:
According to the National Planning Committee (1938) the importance of cottage and small-scale industries tor improving the economic life of the large masses of the rural people arises from various advantages which industries enjoy.
(i) Employment in the rural setting of the worker’s own place of habitation combined with numerous physical, moral, material and other benefits that go with such employment;
(ii) Finding means of livelihood for the largest number of persons;
(iii) Offering opportunities for profitable employment and development of inherent talent and aptitude in occupation which should be congenial to them;
(iv) The opportunities of following more than one vocation for means of livelihood, particularly occupations for the cultivating classes;
(v) The comparatively lower cost of living for a similar standard in rural areas than in urban areas;
(vi) The increased employment in rural areas leading to spreading over of purchasing power which is confined to urban areas at present;
(vii) They effect decentralisation of industries by creating industrial estates.
The Planning Commission attached great importance to the development of rural industries. In the First Five Year Plan it said – “The importance of small scale production in the predominantly agricultural economy can hardly be stressed. What is essential for economic development on democratic lines is a diffusion of sources of power and instrument of production which should release new springs of energy among the people and make them participate actively. Small scale industries are essential to provide subsidiary or alternative occupations and to utilise local raw materials or cater to local markets.”
The Industrial Policy Resolution, 1956, while emphasising the role of cottage and small scale industries stated:
“They provide immediate large-scale employment; they offer a method of ensuring a more equitable distribution of the national income and they facilitate an effective mobilization of resources of capital and skill which might otherwise remain unutilised. Some of the problems that unplanned urbanization tends to create will be avoided by the establishment of small centres of industrial production all over the country.”
In the Second Five Year Plan it observed. “Village and small industries in their different aspects are an integral and continuing element both in the economic structure and in the scheme of national planning. The primary object to developing small-scale industries is to extend work opportunities, raise incomes and standard of living and bring about a more balanced and integrated rural economy. Inevitably, in rural areas, the traditional industries have to be given immediate consideration.”
The Fifth Plan rightly mentions:
“A significantly large number of persons already dependent upon traditional industries like handloom, sericulture, coir, khadi and village industries are living below the poverty line….Therefore, the principal objectives of the programme for the development of different small industries in the Fifth Plan are to facilitate the attainment of some of the major tastes for the removal of poverty and inequality in consumption standards of these persons through creation of large scale opportunities for fuller and additional productive employment and improvement of their skills so as to improve their level of earning”.
The Janta Party Monifesto, 1977, clearly stated that to ensure full employment and decentralisation of economic power, the country must “follow the Gandhian precept that whatever can be produced efficiently by decentralised industry should be so produced. There is room for heavy and large-scale industry but only where it is not possible to organise such production satisfactorily in the cottage and small scale sector.”
According to the Draft Five Year Plan (1978-79), The rapid and widespread development of small and cottage industries is one of the major objectives of the Plan as a part of the primary goals of reducing unemployment and underemployment in the country.
The major components of the strategy of village and small scale industries are:
(i) To generate opportunities for fuller and full time employment by- (a) revitalising and developing the existing traditional and other small scale industries, and (b) promoting intensive development of new viable small industries ;
(ii) To raise the level of earnings of rural artisans, handloom weavers, craftsmen and others employed in these industries;
(iii) To promote the growth of these industries in rural areas and small towns; and
(iv) To reduce progressively the role of subsidies by providing these selectively for credit and development of skills, designs and marketing.
Village and small industries (VSI) sector comprises modern and traditional segments of industry. The modern segment of VSI sector includes Small Scale Industries (SSI) and powerlooms, which use modern technology in manufacturing process. The traditional segment of the VSI sector consists of handlooms, sericulture, khad and village industries, coir industries, handicrafts and wool development activities of unorganised sector.
Classification of Cottage and Small Scale Industries:
The cottage industries may be classified into the following categories:
(i) Part-time rural cottage industries, which cover all such industries which provide supplementary occupation to agriculturists and which are mostly agro-industrial in nature e.g.:
(a) Processing industries—processing of cereals and pulses, of extraction, cotton ginning, coffee grinding, groundnut decortication, rice hulling, etc.
(b) Agro-based industries—dairying, poultry piggery, bee-keeping, sheep and goat rearing, fish culture, sericulture, arboriculture, etc.
(c) Fruit and vegetable preservation and utilization— bottling and canning of fruits, dehydration of peas, chutney, pickles, sauces, soaps, sherbet making.
(d) Handloom weaving, hosiery and knitting.
(e) Tadi, palm gur, jaggery, khandsari making; flour grinding, dal making, oilseed crushing, bakeries and confectionaries.
(f) Basket and rope making, cane and wicker work, biri making etc.
(ii) Whole-time rural industries, comprise mostly of village crafts like:
(a) Pottery, clay toys, making of bricks and tiles, kitchen wares and earthen utensils, limestone making.
(b) Saw milling, wood work and carpentry, blacksmithy.
(c) leather flaying, during, tanning of hides and skins, making of foot-wear, collection and processing of bristles, animal casings, utilization of horns, hoof and bones, cattle carcass, etc.
(iii) Urban cottage industries generally provide whole-time occupation to the workers engaged in them, e.g.:
(a) Gold and silver ornament making, brass and metal utensil making, trunk and suit-case, metal containers, and galvanized buckets making.
(b) Wood and ivory carrying, card board boxes, pencil making, saw milling, furniture and joinery works.
(c) Fabric making, tailoring and ready-made garments, thread manufacture, hosiery and knitting.
(d) Toy making, sports goods, stationery goods, paper making.
(e) Aerated water and soft-drink.
Small Scale Industries:
Small scale industries are undertakings having investments in fixed assets in plants and machinery not exceeding Rs. 10 lakhs.
These industries may be classified into four types:
(i) Part-time urban small scale industries; consist mostly of seasonal industries engaging part-time labour, e.g., pottery, tiles and cement pipes, sanitary wares.
(ii) Whole-time urban small scale industries include small perennial factories in urban areas, like:
(a) Biri and cigarette making;
(b) Blacksmithy, carpentry, engineering units for servicing of factors, harvesters, threshers, ploughshares, duster and sprayer of insecticides;
(c) electrical units for electrical installations, servicing electrical motors, pumping sets, tube-wells, grinder flours and dehusking mils, powerlooms;
(d) Hosiery plants, bobbins, furniture making, printing presses, roller skins;
(e) Handicrafts like newer durrie, and carpet making, embroidery, tailoring, soap, coir products, hair oils and perfumery;
(f) Metal based industries like galvanised buckets, boxes, brass utensils, wire products, builders’ hardware small foundries and forge shops, welding, galvanising and electroplating;
(g) Dyeing, drugs and medicines, moulded plastic goods, fertilizers ;
(h) Miscellaneous industries like umbrella assembling, cycle repairing, storage batteries, cycle parts, aerated water, soft drinks, confectionery, basket and cane work, goldsmithy, leather work.
(iii) Part-time rural small scale industries include all seasonal factories in rural areas primarily concerned with the processing of agricultural produce like rice, dal, gur making and flour mills.
(iv) Whole-time rural small scale industries are extremely few which suggests that it is in this field that scope for their setting up is the greatest.
Role of Cottage and Small Scale Industries:
Small Scale Industries (SSI) play a significant role in national economy. Significance of small scale industries has been recognised worldwide. Small scale industries in India axe recognised for their contribution to employment, innovation and economic dynamism. SSI units are helping to generate new jobs, supplying a wide range of products, contributing to exports and helping in more equitable, distribution of national income. Small scale units are emerging as outsourcing destinations.
Small scale industry sector has developed considerably during the plan period. By the end of March 2002, there were over 3.4 million small scale industrial units in the country accounting for more than 40 per cent of the gross value of output in the manufacturing sector and about 35 per cent of the total exports of the country. They provided employment to over 19.2 million persons which is second only to agriculture. It has been estimated that during the Ninth Five-Year Plan, small scale industries created over 3.2 million jobs.
Apart from the qualitative growth, there has been a significant increase in the variety of products manufactured by these units. Small scale sectors has ventured into many new and sophisticated fields of production which include TV set, cardiac pacemakers, ECG machines and hearing aids. They also supply parts and components to large scale industries engaged in the manufacture of machine tools, bicycles, automobiles, electrical appliances and machining.
Present Plight of Cottage and Small Scale Industries:
Regarding village industries the Planning Commission has admitted that the development of such industries is hampered by the present level of technology and by shortage of trained and experienced supervisory personnel…………. While these industries have helped to provide partial relief to village artisans and under-employed women workers in the villages, they have not been able to provide fully remunerative work or to attract young men with same measure of training and education.
The Fourth Five Year Plan has indicated the principal lacunae and deficiencies of these industries thus- “(i) The coverage of these industries under the development programmes is still rather limited (ii) Shortage of raw materials emerged as a serious retarding factor in the expansion of several industries ; (iii) Elements which contribute to the intrinsic strength of small Industries, viz., the adoption of appropriate technology and of proper management methods have not always received sufficient attention ; (iv) Certain essential facilities, particularly research have not been organised on any sufficient scale for the small scale industries; (v) The progress in building up ancillary industries have been slow ; (vi) Success in promoting industries in rural areas has been very limited ; (vii) the wage levels in traditional industries continue to be low and sustained in appreciable measures by subsidies, rebates, etc.”
Problems of Cottage and Small Scale Industries:
1. Shortage of Raw Materials:
The cottage worker suffers from acute shortage of raw materials. The handloom industry is wholly dependent upon the supply of yarn from cotton mills and hence the shortage of yarn is always felt. The tanners also complain that good quality hides are bought by rich middlemen on behalf of city firms and exported, and similarly goods type of wool finds its way to cities and hence a serious shortage of these raw materials is often felt.
They also pay comparatively high price for raw materials because of the middlemen. Thus the artisan does riot get enough of what he wants, what he gets is of poor quality and that too has to be bought at higher prices. In addition, there is also a considerable lack of reliability in the quality of raw material sold by the middlemen with the result that it destroys the reputation of the artisan who uses them.
The result, is that these industries very often fail to produce goods in requisite quantities of good quality and at cheap rates.
The future growth of these industries depends on access to raw materials and equipments. The International Team, therefore, recommended specific revision in the present system of allocations which redress the current inequalities of allocation and distribution between large and small industries. It suggested a phased programme toward a single price-tax system for all commodities.
Efficient marketing would depend upon the choice of articles to be produced, by exploring the potential demand of the rural areas and by converting it into effective demand and by gauging the demand of the urban areas as well. As far as possible the marketing organisation of small producers should be a co-operative society—which should handle supply as well as the marketing functions of the members. The marketing organisation should be conversant with the government purchase policy and the facilities offered by the various organisations.
2. Lack of Credit and Finance:
The financial disability of small artisans is beyond doubt. His financial needs consist of the purchases of raw materials, working expenses and accommodation between production and sale of the products. Their internal sources are quite inadequate. “This leads to instability of their profits which deters banks from giving insecured loans.” Their requirements are met by moneylenders or merchant dealers and village sahukars who usually charge high rates of interest. The total amount of loans granted to them by the commercial banks forms a very small part of the total loans to the industry.
The Second International Team recommended that the concessional interest rates (as at present prevalent) should be replaced by rate move nearly related to those in the market, and individual borrowers should be charged the same rates. Earnest money deposits should bear interest. Hire-purchase finance is simple, self-securing and flexible method of giving financial assistances and has a wide scope for further expansion.
Further at present most of the units are debarred from getting finance because of conventional notions about credit-worthiness, repayment schedules and overdues. Finance, therefore, is made available by the Apex Industrial Co-operative Banks, and even by the Central Co-operative Banks (which have surplus funds) provided reasonable guarantees for repayment are made either by the promoters or the Government.
Nearly all governments have set up Agro-Industrial Corporations for financial as well as technical assistance. The establishment of the Industrial Development Bank under the Reserve Bank of India is also a right move. But it is felt that only an organisation like the Rural Industries Commission would be able to co-ordinate the work of all these agencies while seeking co-operation from Commercial and Urban Co-operative Banks.
3. Low Level of Technology and Skill:
The development of the village and small scale industries is hampered by the present low level of technology and shortage of trained and experienced supervisory personnel. So that the methods and art of production technique, especially in handloom, village ghanis and tanning and pottery are even now antiquated.
The small scale industries are provided, at present technical advice and assistance by three sources—the Central Small Industries Organisation; common facility workshop; and the prototype-cum- production centres. But the facilities provided by these bodies are not sufficient and satisfactory.
Instead of providing too many services in too many locations there should be greater concentration of activity in major locations. Design work taken up should be much more carefully related to Indian market requirements and the ability of small industries to produce machines after they have been tested.
If the small scale industries are to compete with big industries, they must keep pace with advanced technology. According to Dr. Gadgil, “The small size of industries must be compatible with efficient production and as low an investment as practicable. Technology may be evolved out of traditional techniques or derived from advanced techniques by modifications or adjustments or could even be newly created according to needs.” According to Dr. Schumacher, the average capital cost for an industrial unit should be from Rs. 1,000 to Rs. 2,000 per person.
Skill formation in the rural areas may be promoted through the basic and multipurpose polytechnic schools, systematic mobile demonstrations, in plant training facilities and audiovisual displays in which the best technology that has been useful in pilot industrial projects should be imparted to the trainees.
4. Industrial Estates only in Urban Areas:
The scheme of industrial estates was adopted to take the industry to rural areas. But in reality, because of availability of power, water supply and transport, most of the estates have been established in the precincts of the towns. It is, therefore, necessary to establish theses estates in rural areas. Each estate should consist of not more than three/four factories (looking to the capacity of the neighborhood to support and find resources for the same).
They should also have a community workshed, equipped with common service facilities for supply-cum-marketing work. If power is available, a few machines like the circular saw drilling machines, welding sets, blowers, etc., smaller sheds should be set up in individual villages, each to accommodate 5 to 10 artisans, to whom tools could be distributed at subsidised prices.