INDIAN INSTITUTE OF LEGAL STUDIES

DAGAPUR, SILIGURI ,DARJEELING

SUBMITTED BY:
NAME: KARAN GUPTA
ROLL NO: 03
SECTION : A
SEMESTER: III
COURSE: BA.LL.B
SUBJECT : SOCIOLOGY III
TOPIC : STUDY ON THE COTTAGE INDUSTRIES OF
SILIGURI AND THEIR IMPACT ON THE UPLIFTMENT OF
RURAL ECONOMY

SUBMITTED TO :
MS AMIT KHAWAS
(ASSISTANT PROFESSOR OF LAW )
 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my professor as well as our

principal who gave me the golden opportunity to do this wonderful project, which also
helped me do a lot of Research, and I came to know about so many new things I am
really thankful to them.

Secondly, thank my parents and friends who helped me a lot in finalizing this project
within the limited In frame
 STUDY ON THE COTTAGE INDUSTRIES OF SILIGURI AND THEIR
IMPACT ON THE UPLIFTMENT OF RURAL ECONOMY

Abstract
Cottage industries is a term that was prevalent during the eighteenth and nineteenth centuries
to describe the home-based system of manufacturing. This term is also used today to refer to
goods or services that are produced at home. Sewing, craft production, sales and marketing,
typing, bookkeeping, and auto repair are just a few examples of home-based employment.
Rural families were some of the first to become involved in the cottage industry. They added
to their agricultural income by making products at home. Merchants provided the raw
materials to the families, collected and marketed the finished product, and then paid the
family a percentage of the price charged to the end consumer. Some of the items made by
these at-home workers were cloth and clothing, shoes, cigars, and hand-decorated items.
Cottage industries developed in cities around 1870, resulting in the harsh tenement housing
system. Immigrant families lived and worked in these crowded, unsafe apartment buildings.
They worked for extremely low wages, usually making garments. This system lasted until
around 1920, when better management of factories made home-produced goods less
competitive.

What Is a Cottage Industry?

A cottage industry is a small manufacturing business that is owned and operated by an
individual or a family, typically operating out of a home rather than a purpose-built facility.

Cottage industries are defined by the small amount of investment that is required to start one.
They often focus on producing labor-intensive goods but face a significant disadvantage
when competing with factory-based manufacturers of mass-produced goods.

The cottage industry refers to small manufacturing units producing goods and services using
conventional and low-technology methods. An example of the cottage industry is the locally
produced handicrafts and textiles, which are still the backbone of many rural economies
around the globe.

Members of the household and materials usually provide the labor for such a setup for
production are mostly locally sourced. Profits generated from the operations are typically
used to meet the household’s expenses.

How Cottage Industries Work

The first cottage industries in the U.S. and Europe were light manufacturing operations
engaged in subcontracted work including garment-making, textiles, or sewing, as well as
shoemaking and small metal machine parts.
In many cases, these cottage industries produced finished goods using raw materials supplied
by the contract provider. In the developed world, many contemporary industries that currently
operate in factories replaced cottage industries that thrived before the Industrial Revolution.

Cottage Industries in Developing Countries

Cottage industries play a significant role in the economies of developing countries. They
require very small investments to get off the ground.

Developing nations have comparative advantages in creating successful cottage industries.

Their lower cost of living makes it feasible to produce labor-intensive goods at competitive
prices, allowing a small business to make a sufficient profit.

Some cottage industries grow over time and employ others in the community. Because their
products tend to be handcrafted using traditional tools and machinery, their productivity is
unlikely to rival in sheer volume the products of mass manufacturing.

Cottage industries also are an important source of supplemental income in rural areas. When
the growing season ends, some farmers turn to their cottage industries to produce income. In
villages, a cottage industry can grow over time as local residents come together to produce
crafts for sale in local markets or even for export abroad.

Types of Indian Cottage Industry

The phrase “cottage industry” refers to manufacturing businesses that do most of their work
by hand. India is recognised and known for its diversified culture, handicrafts from traditional
cottage industries, and a wide range of cuisine items, among other things. Cotton weaving,
carpet weaving, silk weaving, leather industry, metal handicrafts, and minor food processing
are the principal cottage industries in India.

Cotton Weaving: In India, cotton weaving is a very important cottage industry. Cotton
clothing is commonly worn across the country, therefore the expertise dates back to ancient
times. Cotton clothing is noted for its classic design, rich colour, and patterns created by
skilled weavers using handlooms. Maharashtra, Tamil Nadu, and Gujarat are the three states
with the most cotton production.

Sikh weaving: Silk weaving is another well-known cottage industry in India. Silk is a key
producer and exporter in our country, both domestically and internationally. Karnataka is the
most important silk producer, accounting for almost 70% of the total silk weaving industry.
Within our count, Mulberry, Tassore, Muga, and Eri silks.

Carpet Weaving: Carpet-weaving was first introduced to India during the Mughal period.
The Kashmiri carpet is famed for its outstanding quality and texture, but so are the durries
and coir carpets. The carpet business is spread out over the country, with the majority of it
concentrated in Kashmir, Rajasthan, Punjab, Uttar Pradesh, Andhra Pradesh, and Punjab. In
addition, the Indian government has established the Carpet Export Council to promote
knotted rugs and other forms of floor coverings from all around the country.
Leather production: India is a major producer of high-quality leather to worldwide markets,
meeting roughly 10% of global demand. The leather sector employs approximately 2.5
million people and is one of India’s largest export earners. Tamil Nadu, West Bengal, and
Uttar Pradesh are the Indian states that produce leather.

Metal Works: In India, metal has traditionally been utilised to create figurines, jewellery,
utensils, and other items. India’s metal handicrafts are well-liked around the world and
contribute significantly to the country’s economy. Metal handicrafts are made without the use
of high-tech equipment and are made with hand-operated tools.

PROBLEMS FACED BY COTTAGE INDUSTRIES IN INDIA

The cottage sector is valued for its huge potential for job creation. However, while
employment in this business has increased over time, people’s income has declined as
middlemen provide low rates to the makers while taking large portions of money from the
purchasers. But it isn’t just the middlemen and dealers who are to blame. The current state of
the cottage industry is also due to the altered foreign policies and globalisation. Power looms
are always posing a threat to handloom weavers. These employees have dedicated their entire
lives to knitting and needlework.

They have an unmatched level of expertise. However, they are still in the same area where
they began years ago. An industry that employs a substantial portion of our population is in
such bad shape. With almost 4 million individuals employed in the handloom sector, this
situation demonstrates the hardships that these people face. It’s worth noting that nearly half
of the people employed in this profession live in poverty. In addition, according to the 2017
census, these people’s average yearly household income is barely Rs 41,068. And, given the
enormous family sizes in this segment of the population, the per capita income is hardly
enough to live on.

In India, cottage industries face a scarcity of capital and a great supply of labour, forcing
them to invest in capital-saving measures. As a result, there is a pressing need to employ
strategies that not only increase output but also expand labourers’ abilities and suit the needs
of the local market. Efforts should be put toward the advancement of technology so that
workers can live comfortably. The government could also offer subsidiaries to help cottage
industries flourish, particularly in their early stages. Cottage industry labourers frequently
find themselves up against the odds at every stage of their operation, whether it’s purchasing
raw materials or marketing their wares, securing money or obtaining insurance coverage.

The Raw-Materials Issue

The owners of these businesses cannot afford to buy raw materials in bulk due to their
restricted resources. That is why they pay a lot of money for low-quality materials.

Financial Issues

These industries do not have access to low-cost, easy-to-get financing. The government’s and
banks’ funding systems are set up in such a way that these businesses must fulfil several
formalities and deal with numerous obstacles.

Issues with marketing

These enterprises are primarily found in villages, and their ability to locate adequate markets
for their products is hampered by a lack of transportation and communication services.

A Managerial Deficit Talent

Cottage and small-scale enterprises are typically conducted by tiny business owners who lack
managerial and organisational skills. How can these sectors compete with the huge seals
industries, which are managed and structured by experts in the field?

Rivalry with large-scale businesses

The fundamental issue these industries face is their inability to compete with large-scale
businesses. Because they lack access to the economies of large-scale production, they are
unable to compete with large-scale industries. When it comes to capturing the attention of
contemporary industry, cottage industries are the losers. This necessitates the protection and
promotion of cottage industries through the development of state policies aimed at enhancing
the industry’s profitability and technological features. It is past time for the government to
take some action.

Small Scale and Cottage Industries

Small Scale and Cottage Industriesare part of the MSMEs. Small-scale industries are those
where production, manufacturing, and service delivery are carried out on a modest scale.
Cottage Industries are typically extremely small businesses that are founded in homes or
other modest structures. While family labour is used in the cottage industry, outside labour is
used in small-scale industries.

Small Scale Industries and Cottage Industries are the backbones of the MSME. Through the
article, we will be covering the basic aspects of both industries, along with their role,
importance and problems faced. We will also be discussing the government initiatives taken
up to benefit the small scale and cottage industries.
Small Scale Industries

Small-scale industries are those in which production, manufacturing, and servicing are
carried out on a modest scale. The overall investment in such industries does not exceed one
crore, and it is typically made as a one-time investment in plant and machinery.

Smaller machines and extremely constrained people are used in small-scale enterprises to
produce items and provide services. Small scale industries, also known as SSIs, are
considered the backbone of an economy, which is crucial for a nation like India. It greatly
aids in providing work possibilities for the country's inhabitants because it is a labour-
intensive business.

Some examples of small scale industries include:

Pickle manufacturing industries

Incense stick manufacturing industries
Paper plate manufacturing industries
Water bottles manufacturing industries
cosmetic salons
school supplies
Bakeries
Small toys manufacturing industries
Industries for paper bags
Leather belt manufacturing industries

Characteristics of Small Scale Industries

The characteristics of Small scale industries in India are as follows:

Small scale industries often only have one owner, which implies they are either partnerships
or sole proprietorships.

Owners of Small scale industries are responsible for managing them. Thus, they actively
participate in the day-to-day operations of the company.
Small scale industries operate in a constrained space, enabling them to satisfy local and
regional needs.

Small scale industries utilise locally sourced, easily accessible resources, allowing the
economy to make the most use of existing natural resources with the least amount of waste.
Due to their high labour requirements, Small scale industries rarely use technology.
Unlike huge businesses, small scale industries are flexible and adaptable to a changing
business environment.
How do small scale industries and cottage industries work for the
development of India?

India has rightly been described as the land of agriculture. Agriculture is highly confined to
the rural areas of the country. It has been noted that rural areas have been playing a vital role
in strengthening the economic development of India by paving the way for small-scale
industries and cotton industries. Also, the Government of India is promoting the small-scale
industries by its policies. The theme of Small scale industries and cottage industries has been
continuously growing within the roots of India.

Role of Small scale industries and cottage industries in Development

It has been mentioned earlier that small-scale and cottage industries play a significant role in
Indian economy. As per a report, around 60% of total innovations in India are believed to
have come from small-scale industries and cottage industries.

Following are their role in the development of India:

Provides employment

This is probably the biggest benefit of small-scale industries. They provide people (primarily
articles and other skilled persons) employment. People who deal with traditional arts can get
easy employment utilising their skills. Unemployment is a big issue in India, does this is
deemed as a role to diminish the unemployment rate in the country.

Rural advancement and growth

Previously in India, people from rural areas used to migrate to urban areas such as
Metropolitan cities in search of work and employment. The emergence of small-scale
industries and cottage industries have boosted the rural advancement and rural growth. It is a
continuous process and people of rural areas have good scope in their towns and village itself.

Use of Domestic resources

Small-scale industries and cottage industries pave the way towards utilising and mobilizing
the domestic and local resources. This gets unused resources into usage. It promotes the
traditional skills and handicrafts. Today they are in a big demand in the country.

Large Export
The small-scale sector has been thoroughly active in Exports. In recent years small-scale
industries and cottage industries have marked a surprising growth in exportation. This has
strengthened the economy of India. Large export, as per economical terms, reduces the
pressure on a country's balance of payment. Also, it helps in incrementing the Indian Foreign
Exchange reserve.

Promotes Women growth

The kind of methodology and business ways, the cottage industry, and small-scale industry
worked at is an apparent promotion of women growth. The work is style develops several
craftsmanship skills in women. In addition to that, Cottage and small-scale industries devised
the equal distribution of income which is considered to be a good move in Indian
development.

Develop entrepreneurial skills

Entrepreneurship is a booming term in the corporate and non-corporate corridors of India.

Developing entrepreneurship skills is a big benefit for a person as well as is a big role
towards the development of any country. Small-scale industries and cottage industries let the
people dealing in small sectors feel the sensation of self-reliance in the society.

Conclusion

India’s cottage industries are culturally and economically significant. They preserve ancient
traditions while simultaneously employing a large number of people. Because these industries
confront intense competition from other economies, society should provide support to prevent
exploitation and further develop them. The only solution to combat the monster of
unemployment in over-populated countries like ours is to promote cottage and small-scale
industries.
Cottage industries are unorganised and fall under the category of small scale industries. They
use traditional ways to create consumable goods. Furthermore, these industries emerge in
areas where unemployment and underemployment are common. As a result of this technique,
the cottage industry benefits the economy by absorbing a large portion of the surviving
workers in rural areas.
On the other hand, the industry faces numerous challenges in a variety of ways. As a result,
the government is attempting to address the sector’s issues since it recognises that the sector
has a lot of promise in a variety of sectors if properly supported.

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