Plight of Handicraft Industry

Plight of Handicraft Industry

India's handloom and handicraft industries have been the backbone of its rural economy for decades. In addition to providing a crucial livelihood for the country's rural and urban populations, it is the second-largest employer after agriculture. Craftsmen have their own raw materials, and the sector is well known for pioneering zero-waste practices with a legacy to carry forward for the posterity which is yet to come.

Approximately 7 million artisans live in India, according to official estimates. However, there are unofficial sources indicating that the number of artisans could reach 200 million. In this sector, the informal and unorganized nature of the industry accounts for the wide range of employment and its disparity in number.

Despite playing such an important role in the growth and development of the economy, this industry has been ignored for a long time. The handicraft artisans suffer a lot due to being unorganized, lack of education, low capital, poor exposure to new technologies, absence of market intelligence and a poor institutional framework. Artisans are usually structured into groups through informal contracts between traders, master artisans and low-skilled artisans where they are exploited due to their lack of knowledge of market prices and expedient of middlemen. More formal systems of artisan organization involve four main types of entities:

  • Self Help Groups (SHGs) are set up with the help of external technical intermediaries such as non profits or through government schemes, and typically comprise 10-20 artisans, usually women. SHGs serve as a form of social collateral, enabling artisans to establish linkages with input providers such as raw material suppliers, microfinance institutions and banks, and downstream players such as aggregators and retailers. We helped women in forming SHGs to overcome the shackles of this plight. 
  • Mutually Aided Co-operatives(MACs) are created to provide artisans with a platform for equitable participation. However, due to strong government influence, this structure has failed to gain popularity in most states other than Andhra Pradesh and Kerala.
  • Producer companies were created as a for-profit legal entity to enable primacy producers to participate in ownership and contribute equity.
  • Private Limited Companies are for-profit legal entities that allow artisans to participate in ownership as shareholders, while enabling external funders to invest capital.

However, most artisans continue to work independently as there is a widespread lack of awareness about the advantages of being organized into the above forms.

Traditionally, raw materials used by artisans were widely available due to the close linkages between evolution of crafts and locally available materials. However, with the breakdown of these traditional structures, along with competition from organized industry, artisans find it challenging to buy quality raw materials at affordable prices. In the absence of raw material banks, they are often forced to rely on local traders who provide them with raw materials against orders, albeit at high prices, or switch to non-traditional raw materials

The total revenue of the craft sector has gone down by 8000 crores, thereby decreasing the income levels of the craft sector by 30%. (Source)

Adding to the misery, came the COVID-19 pandemic. The handicraft sector was one of the worst hit by the outbreak of the virus.  As a result of the COVID-19 lockdown, many economies suffered, there were millions unemployed, and fear of touch has had devastating effects on the handicrafts sector, as any work 'tinged by human hands' has been shunned out of apprehension about the spread of the lethal disease. There are only 15 working looms out of 40, which has left most of the artisans jobless. Since production has completely halted and enormous inventories are piling up, the sector is facing severe cash crunches. 

Neither exhibitions nor orders have resulted in sales. Due to fewer workdays and a lack of sales, raw materials have become scarcer, and overhead costs have risen. The artisans do not have funds to reinvest and, therefore, do not have sufficient savings to pay for healthcare, which adds to their difficulties, as they didn't have sufficient funds to afford medical treatment if any of their family members got infected with the virus. 

In order to restore their stature and give a new lease of life to crafts that are languishing in obscurity, Virasat was envisioned. Project Virasat aims to uplift these craft forms in all possible aspects to maintain the dignity of the artisans, creating opportunities not only for them but also for their future generations that can safely carry on the craft form, thus molding vessels of hope.

Our vision is to develop Virasat as a launchpad for struggling Indian craft forms, creating demand globally through domestic and international market expansion. We envision enhancing business opportunities, entrepreneurial zeal as well as the economic prosperity of our Karigars and narrate their stories, tales and traditions with every Virasat craft.