Industries in Karnataka

Industry is playing a pivotal role in the development of Karnataka State. The secondary sector in the State accounts for nearly a quarter of the State income (in real terms) of the total output in the economy ^[4]. The average annual growth rate of industrial production over the period from 1981-82 to 1990-91 was about 6.4% as against 7.9% in the country as reflected in the index of industrial production.

Small Scale Industries: an Overview.
The basic framework for the industrial policy of the government was first spelled out in the industrial policy resolution of 1956, with an emphasis on the development of small scale industries. Small, medium and large industries have been assigned a mutually complementary role with a view to facilitate an integrated and harmonious growth of the industries sector as whole and with the objective of economic growth with social justice.

The policy measures, announced in 1991 by the government provided further impetus to the growth of the small sector. The primary objective of the 1991 policy measure was to impart more vitality and growth impetus to the sector to enable it to contribute fully to the economy, particularly in terms of growth of output and employment. As per the recent policy (1991), in small scale industries undertaking the investment in fixed assets in plant and machinery whether held on ownership terms, or on lease or by hire purchase does not exceed Rupees (Rs) 60 lakhs.

The spectrum of industries ranges from unorganised traditional sectors and modern small-scale sectors to large and medium scale industries. The traditional sector and small scale sector provides maximum employment (413.39 lakhs in 1989-90) and constitutes an important component of the economy. In terms of value added it is estimated to contribute 50% of the value added in the manufacturing sector. The uniform distribution and growth in this sector besides resulting in preponderance of self-employment and under dispersal of industrial and economic activities, ensures maximum utilisation of both human and material resources. The economics of production is important in small-scale industries. Energy consumption plays a key and dominant role in the production economics of these industries. The small-scale industries sector plays an important role in the industrial economy of the state. It contributes substantially to the industrial production and in generating employment. These industries are dispersed all over the state, however there is disparity in regional distribution. Table 2 illustrates the growth of small-scale industries in Karnataka since 1969-70. The growth in last decade is phenomenal as the number of industries has increased from 37,148 to 129,915 with a percentage annual growth rate of 15.01 % and percentage annual growth in manpower employed of 13.58%. Table 3 gives the cumulative information of SSI's from 1982-83 to 1991-92 for each district while Table 4 gives percentage yearly increases. From Table 3 it is evident that the Bangalore district with 27,691 leads all other districts. The increase in the number of industries in the decade is given in Table 5a. Belgaum has annual average growth of 18.61 % while for Bangalore it is 9.31 %. Information regarding the number of industries, investment, and manpower employed in the SSI sector at the end of financial year 1991-92 is listed in Table 5b. The percent number of units varies from a low value of 1.15% (for Kolar District) to a high value of 21.97% (for Bangalore district). Investment per job computed for each district reveals a variation from Rs.9539.20 per person for Dharwad to Rs.22652.09 per person for Dakshina Kannada, indicating that some industries are capital intensive.

Workers in manufacturing and household industries are listed in the eleventh column of Table 5b. The share of manpower in SSI to the total manpower in the industries sector shows a variation of 16.67% for Chitradurga and 18.27% for Dakshina Kannada to 88.34% for Dharwad, 93.74% for Chikmagalur and 97.08% for Raichur. The lower values for Chitradurga and Dakshina Kannada are mainly due to the presence of large number of household industries in these districts. Most of these units are located in rural areas.

Dispersal of small scale units.
The second census of registered small scale units ^[5] conducted by the Directorate of Industries and Commerce of 40,525 industries reveals that 38.14% of total Industries are located in rural areas, while 49.97% in urban area and 11.86% units in metropolitan city of Bangalore as indicated in Table 6a. A look at the employment generated in these industries reveals that 40,525 units have provided employment to 244,039 persons (shown in Table 7). The food products sector (National Industry Code: NIC 20 &21) leads with 19.4% of total employment. This is followed by machinery and parts units (8.65%), Non metallic mineral products 8.33%. Table 6b gives information regarding dispersal of units in nature of activities (major activities such as repairing, servicing etc).

The total production of the 40,525 units surveyed was Rs. 2,52,687 lakhs. Out of this 28.32% is by food products, metal products (12.39%), and paper products (11.46%). This is illustrated in Table 7. The food products sector constitutes a major component in the SSI sector and most of these units are located in rural areas of Karnataka. As rural industries are one of the prime actors in the rural energy scene, further study is carried out on industries located in rural areas.

Rural Energy Scenario.
Rural energy supply is closely tied in with agricultural and forest production, and with an overall crisis of agricultural productivity and environmental degradation linked to modernisation and changes in land use. The rural community depends mainly on non-commercial energy for domestic and rural industrial needs ^[6]. If new energy strategies are to be successful, rural energy needs will have to be placed squarely in the context of integrated approaches to rural development, basic needs and general questions of rural poverty, land and other scarce resources. With the emphasis on rural development by the government, rural industries are gaining importance. This paper attempts to focus on the various ecological parameters, such as energy conservation and raw material availability, involved in the successful functioning of rural industries.

The rural industries are important to the stability and growth of the regional economy. They have a significant role in averting migration of rural people to urban areas and cities which in turn cause the start of new slums and hence lead to environmental and ecological problems. The rural industries thus help in the well-being and survival of rural communities. The rural industries process local raw materials, they also tend to rely on local sources such as firewood and agricultural residues for the heat energy they need.

Wood is the traditional domestic fuel in rural areas. With the depletion of forest resources, the financial viability of many industries is threatened due to the increase in fuel wood prices and the lack of technical and financial assistance to switch over to alternate fuels. Although conventional fuels

are available in many rural areas, their cost per unit of useful energy is usually much higher than that of traditional sources. With the use of conventional fuels, industry becomes more dependent on distribution networks which are liable to interruption and it is not desirable to use high quality energy, such as electricity, for low quality work such as heating. This unreliability in supply and the high cost of conventional sources of energy creates a demand for viable alternatives to meet the needs of rural industries locally. The supply of energy from wood and residues are more flexible and reliable. With increasing industrial demand for wood and residues, both for energy and for other domestic applications, agricultural and industrial purposes puts further pressure on traditional sources, often with adverse effects on other end users, on the stability and productivity of the rural environment. This in turn results in a demand for increasing biomass stocks by raising energy plantations to meet the growing needs of the population for fuel, for domestic use and in rural industries.

Rural industries provide the majority of off-farm employment and income generation in rural areas. In Karnataka there are 27,028 villages with

175 taluks*. The population of the state is 44,817,398 with a density of 234 persons per square kilometer and 71.1 % of total population are in rural areas. Deforestation and loss of soil fertility has resulted in a serious reduction in food production by traditional agriculture. Increase in population, leading to fragmentation in land holding, has resulted in further degradation of agriculture land. Fuel shortages are usually tied with environmental deterioration and have also affected food production. Rural industries in this regard are playing a significant role by providing employment to poor peasants especially women. This sexual division of labour has influenced women's ability to produce food and provide the nutrition required for their family.

The cashew processing industries are taken up for further studies among rural industries to explore the role of rural industries in the rural economy and role of traditional fuel in the survival of these industries. Cashew processing industries are mainly located in the rural areas and are labour intensive as well as energy intensive. Cashew processing mainly depends on fuel wood and other agriculture residues for the heat energy required. These industries employ mainly women and hence have helped the village women to attain economic independence and hence self-sufficiency. Cashew industries are located mainly in the coastal belts of Karnataka, due to the availability of raw material (namely cashew nuts) in the region. Coastal areas are densely populated and relatively biomass scarce areas. The non­-availability of fuel wood and agricultural residues have often caused serious problems.