Gujarat Government Plans Revised Strategy To Revive Cottage Industry

Notably, despite the State government having formulated a policy framework for cottage industries, the sector has not witnessed the expected growth. As a result, a new action plan is now being prepared to integrate cottage and village industries with tourism, thereby providing them a global platform. For this purpose, case studies from Rajasthan, Odisha, Uttar Pradesh, Kerala, and West Bengal have been undertaken. Based on these learnings, a comprehensive strategy will be developed focusing on financial assistance, e-platforms, PPP models, access to global markets, branding, and ensuring fair wages for artisans.

An official from the Cottage Industries Commissionerate said that the State government introduced a policy a year ago with the objective of generating 1.2 million jobs over five years. Under the Vajpayee Bankable Scheme, the maximum loan limit has been increased to ₹25 lakh. Interest assistance under the Dattopant Thengadi Artisan Scheme has been raised to ₹3 lakh, while subsidies for entrepreneurs have been enhanced to ₹3.75 lakh. The benefits of this policy will remain available until 2029. Currently, the sector provides employment to around 1.5 million people.

'One District, One Product' Initiative

However, sources pointed out that while policies exist, artisans do not receive loans on time. Although artisans have been onboarded onto e-commerce platforms, they lack proper guidance. There is little official support for market access and branding, and the “One District, One Product” initiative is yet to yield tangible results. The government’s decision to train 60,000 artisans annually is also hindered by a lack of coordination between government bodies and institutions.

Acknowledging that Uttar Pradesh provides employment to 2.5 million people in this sector, an official from iNDEXT-C noted that despite Gujarat’s strong potential, nearly one million people are employed in cottage industries in the State. In 2022, cottage industries contributed 12% to Gujarat’s GDP, largely through exports to Europe, the US, and West Asia. Going forward, alongside policy benefits, the focus will be on artisan training programmes, improved market access, and greater participation of NGOs.

According to estimates by the International Labour Organization, handicrafts and small-scale industries account for 40% of employment in rural areas of developing countries. These industries act as a buffer against unemployment during periods of economic distress. Research by the United Nations Conference on Trade and Development indicates that handicraft products represent 8% of global cultural trade; however, due to the role of intermediaries, artisans receive only a small fraction of the final market value.

Gujarat Looks Beyond State Borders

Case studies from other States highlight several successful models: Uttar Pradesh’s “One District, One Product” initiative, Rajasthan Small Industries Corporation’s e-commerce platform, Kerala’s tourism mission integrating artisans into the tourism economy, and West Bengal’s successful PPP model. According to the UNESCO Sustainable Tourism Programme, linking cottage industries with tourism leads to a significant increase in rural incomes. Drawing from these experiences, Gujarat has decided to move forward with a plan to integrate cottage industries with tourism to unlock their full potential.