The handicrafts industry employs about six million artisans of which a large section includes women and people belonging to the weaker sections of the society.
According to EPCH, the worst effect of recession was on the handicrafts sector when the exports figures saw a sharp decline of Rs 8,000 crore. Extending Nregs to this sector will also reduce the production cost by 25-30%.
Pinakiranjan Misra, partner and national leader, retail and consumer product practice, Ernst & Young told FE, The biggest advantage of extending the Nrega scheme to the handicrafts sector is that it can give stability of supply and potential availability of volume. It will lead to lower price of handicrafts and also better development. Also, it will develop an interest in this sector and may also start attracting private investments.
Indian handicrafts have a high demand in foreign markets, especially new markets like in Latin America, Central Asia, Africa and South East Asia that are under-explored. According to a Delhis handicraft exporter, There is a high demand of Indian handicrafts in foreign markets but it gets a tough competition from Chinese handicrafts because their cost is much lower than Indian handicrafts. The main difference between the two is that the Chinese handicrafts are 90% machine made and 10% handmade whereas it is just the opposite for Indian handicrafts which is why the latters cost goes up. The main handicraft items exported from India include metal and wood wares, hand-printed textiles and scarves, embroidered goods, shawls and imitation jewellery.
The sector has also asked finance minister Pranab Mukherjee to exempt the sector from income and service tax in the Budget.
EPCH has asked the finance minister to further extend the interest subsidy scheme which is expected to end this year, said Malhotra.