ACKNOWLEDGEMENT

I feel deeply indebted and grateful to my esteemed course Mentor and Guide Prof. Amalendu Jyotishi and Prof. Girish.M for the Guidance and Encouragement provided to me during the Course of my project.

I wish to express my gratitude and sincere thanks to esteemed Project guide and Mentor Mr. K.K. Sinha (Chairman & Managing Director), Mr. Nirmal Sinha (General Manager), Dr. B.M. Prasad (Manager Secretary) P&A) and Smt. Annu Bhogal (Company

for their exemplary and encouragement throughout the making of this project.

In the end I will thank my parents who gave me all the required support while making the project.
1

THANK YOU Hanish Goswami

DECLARATION I declare that this project on THE HANDICRAFTS AND HANDLOOMS EXPORT CORPORATION OF INDIA LIMITED is a record of my own work, which was carried out by me under the guidance of Prof. Amalendu Jyotishi and Prof. Girish.M. I have prepared this report during my internship programme (12th March to 19th April). It is a partial fulfillment of the requirements towards the award of Masters in Business Administration, Ohio University, Athens, USA. I also declare that this project is the result of my own effort and that it has not been submitted to any other university for any other degree.

Place: Bangalore Goswami Date:

Hanish

CONTENTS
The Background5 The Organization..9 Main Products..13 Financial Analysis21 Marketing Strategy38 Financial Problems.40 Scenario Analysis42 Perspective Planning.44 Identified Problems of Research..48 Conclusion....52 Recommendations.55 Bibliography.59

EXECUTIVE SUMMARY

The Handicrafts and Handlooms Export Corporation of India Limited Is a Central Public Sector Undertaking under the administrative control of the Ministry of Textiles, Government of India. Its objective is to undertake exports of handicrafts, handlooms products, khadi and products of village industries from India as supplement to private voluntary effort. The Corporation brings to us the masterpieces with finesse of human creativity in authentic and rarest forms. The main objective of the internship is to have a good corporate exposure. This report describes the Corporation in general and consists of various sections. I have started by describing the history of Art, Handicrafts & Handlooms in India which gives a brief idea about them. After that, I continued with Company profile which includes the mission, vision, objectives, liaisons and their products profile. Then, I discussed the Financials with the help of certain charts, graphs and tables which is followed by marketing strategy, current scenario and its future prospects. In the end, I gave my own conclusions & recommendations by interpretating the available data and internal scanning of the Corporation. While working in the organization, I saw how the things worked

systematically in a Government organization, how people respond to tough situations and how efficiently the management takes important decisions. I

was given the opportunity to work in different departments where I came to know about the certain departments in detail. During the internship programme, I found out that overall the corporation is doing well, however, there are some areas which needs proper attention. There are some marketing problems which need to be looked upon. The Corporation is taking certain steps to fix these problems.

BACKGROUND
Art and Crafts comprises of a whole host of activities and hobbies that are related to making things with one's own hands and skill. These can be subdivided into handicrafts or "traditional crafts" (doing things the old way) and handlooms. Some crafts have been practiced for centuries while others are modern inventions. The ground of art history was developed in the West. The oldest existing art forms include small sculptures and paintings on rocks and in caves. The earliest examples of ancient art developed from Mesopotamia and Egypt. Art is basically an outward expression of ones creative qualities and is an outcome of our hidden talents. It is a medium of creating beautiful and momentous qualities. Though art and artistic excellence is something acquired and inborn, it can still be learnt by regular practice and minute observation. It always stimulates our emotions, beliefs, thoughts, and ideas through our senses. Craft refers to the products of artistic production or creation that require a high degree of tacit and technical knowledge. Most crafts require a combination of skill, speed, and patience.

Indian Crafts have an importance of their own. They express the great tradition of our cultural heritage. In India, it is believed that Craftsmanship=Platos idea of specialization onto which the lower society has a specific job in society. In India, craft is always associated with art. The traditional characteristics are very much predominant in Indian Craftsman. A Craftsman inherits his technical skill generally from his father or grand father who may have inherited their technical skills from their forefathers. The process of transmission of skill from generation to generation is a very important factor in the history of Indian Craftsmanship. The Craftsman is considered as an organic element in the national life of our country.

HANDICRAFTS
Handicrafts occupy an important place in the countrys economy as they contribute significantly to the Employment generation and Export earnings. India has a rich history of handicrafts that has evolved over the centuries. The entire wealth of timeless Indian handicrafts has survived through ages. The legacy of Indian culture promises everything- Beauty, Dignity, Form and Style. Handicrafts are described as the craft of the people. In India, it is not an industry but it is a creation symbolizing the inner desire and fulfillment of the community. While handicrafts i.e. Metal ware, pottery, mats or wood-work serve a positive need in the daily life of the people, they also act as a vehicle of self-expression. The handicraft tradition in India has revolved around religious beliefs, local needs of the commoners as well as the special needs of the patrons and royalty, along with an eye for foreign and domestic trade. These handicraft

traditions have withstood the ravages of time and numerous foreign invasions and continue to flourish till date. During the Indus Valley Civilization, India had a rich craft tradition as well as a high degree of technical excellence in the field of pottery making, sculpture (metal, stone and terracotta), jewelry, weaving etc. The craftsmen not only catered to all the local needs but surplus items were sent to ancient Arabian cultures. In the Vedic Age, there were numerous references in the Vedas on artisans involved in pottery making, weaving, wood crafting etc. The Rig Veda in particular refers to a variety of pottery made from clay, wood and metal. It also refers to weavers and weaving. The Gupta Age witnessed the classical period in Indian history which includes the rock cut temples of Ellora and the Ajanta murals. These murals gave us a realistic view of the lifestyle of that time. The craftsmen of that period excelled in jewelry making, woodcarving, sculpture, stone carving and weaving. The Golden period in the history of Indian Art, Craft and Culture was the Mughal Era. The Mughals not only invaded India and ruled it but also brought with them a rich heritage. They introduced new techniques like inlay work, glass engraving, carpet weaving, brocades and enameling. The famous Peacock Throne of the Mughals is one of the finest examples of gem inlay work and metal craft, having few parallels in world art. They also laid the foundation for the famous Mughal miniature painting, Petra dura or inlay work, enameled jewelry and a host of other craft traditions, many of which continue today. The artisan was an important factor in the equation of Indian society and culture. By performing valid and fruitful social functions for the community, he earned a certain status and a responsible position in society. The bold

local styles that the village artisans evolved operated as a great lever in the evolution of Indian art adding to the wealth and variety of color and design. The craftsman was the unbroken link in the tradition that embraced both the producer and the consumer within the social and religious fabric. Art was deeply rooted in them. Thus, Indian handicrafts express a great national heritage.

HANDLOOMS
Handloom constitutes a timeless facet of the rich cultural heritage of India. As an economic activity, the handloom sector occupies a second place after agriculture in providing livelihood to the people. The element of art and craft present in Indian handlooms makes it a potential sector for the upper segments of domestic as well as global markets. Handlooms are an important craft product and comprise the largest cottage industry of the country. Million of looms across the country are engaged in weaving cotton, silk and other natural fibres.There is hardly a village where weavers do not exist, each weaving out the traditional beauty of Indias own precious heritage. Handloom also forms a precious part of the generational legacy and exemplifies the richness and diversity of our country and the artistry of the weavers. The strength of handloom lies in introducing innovative designs, which cannot be replicated by the Power loom sector.Tradition of weaving by hand, is a part of the countrys cultural ethos. Handloom is unparalleled in its tradition and versatility, permitting experimentation and encouraging innovation. Innovative weavers with their skillful blending of myths, faiths, symbols and imagery provide their fabric an appealing dynamism.

In the world of handlooms, there are Madras checks from Tamil Nadu, ikats from Andhra and Orissa, tie and dye from Gujarat and Rajasthan, brocades from Banaras, jacquards from Uttar Pradesh and phulkari from Punjab. Despite this regional distinction, there has been a great deal of technical and stylistic exchange. The states of Kashmir and Karnataka are known for their mulberry silk. The Kashmiri weavers are known for Pashmina and Shahtoosh shawls all over the world. These shawls are of fine quality, unbelievably light and warm. India also produces a range of home furnishings, household linen, curtain tapestry and yardage of interesting textures and varying thickness. Since we know the wide and exciting range of handloom, it is not surprising that the rich and beautiful products of the weavers of India have been called EXQUISITE POETRY IN COLORFUL FABRICS.

THE ORGANISATION
THE HANDICRAFTS & HANDLOOMS EXPORTS CORPORATION OF INDIA LTD. Is a Central Public Sector Undertaking under the administrative control of the Ministry of Textiles, Government of India. It was established in the year 1958 as Indian Handicrafts Development Corporation Ltd (IHDC) and Incorporated as a Private Ltd. Co. in June 1962 as a subsidiary of State Trading Corporation (STC).In May 1991, it De-linked from STC and made an independent PSU under the Ministry of Textiles. HHEC is a trading house in the export of Handicrafts and Handloom products (including Hand knotted woolen carpet and ready made garments) besides

undertaking export of Gold and Silver Jewelry articles. In the year 1997-98, HHEC along with ten agencies was nominated for import of bullion under OGL, and sale in the domestic market. In keeping with its plan for diversification, HHEC also undertook import of mulberry raw silk.

MISSION
To develop, promote and aggressively market the products of Indian crafts and skills abroad thereby providing a marketing channel for craftsmen and artisans.

VISION
Endeavor to promote India aggressively in the world arena and create demand for craftsmanship products by continuously adapting supply to the changing consumer habits of the demand countries. On a continuous basis, allocate resources to help new products in India and market them to the world, thus creating opportunities for manufacturers /craftsmen and other private players in India. Act as a marketing arm for exports from manufacturers/ craftsmen who cannot afford having their own marketing set-ups. Consistently supply buyers products of high quality, right price and on schedule thus keeping up the image of Indian products in the world market.

OBJECTIVES
To undertake exports of handicrafts, handlooms products, khadi and products of village industries from India as supplement to private voluntary effort.

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To undertake special promotional measures in countries whose import potential for Indian handicrafts products, khadi and products of village industries has not been adequately tapped. To trade in and carry on business in goods of the nature which may seem to the company capable of being conveniently and profitably carried on by the company.

VALUES
Buyers satisfaction. Transparency and courtesy. Prompt and professional service. Compassion and better business sense.

COMMITTMENTS
They are committed To provide quality merchandise to foreign buyers within the

stipulated delivery schedule. To provide avenues for better prices to the artisans, weavers and craft persons. To provide technical, financial, marketing and other assistance to the artisans, weavers, crafts persons and foreign buyers. To improve the profitability of the Corporation and to give the Government better returns for the money invested by it. To ensure original handmade/ crafted products of Indian origin. To ensure revival of languishing art & craft of India.

BRANCHES IN INDIA
HHEC Offices are located in different parts of India. The main branches are in Registered Office in New Delhi

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Corporate Office in New Delhi Chennai Regional Office Mumbai Regional Office Kolkata Regional Office Bhadohi Branch Office Ahmedabad Branch Office Srinagar Branch Office

ORGANISATION HIERARCHY BOARD OF DIRECTORS Chairman and Managing Director

Shri K.K. Sinha Shri Jamini Kumar Sharma, IAS Smt.Sarita Mittal Shri B.P.Singh, IAS

Directors

Shri Apurva Verma, IAS Shri Nirmal Sinha

General Managers

Company Secretary
Smt. Annu Bhogal

LIASONS

Ministry of Textiles Ministry of Commerce Standing Conference on Public Enterprises Office of the Development Commissioner (Handicrafts) Office of the Development Commissioner (Handlooms) All PSUs under the Ministry of Textiles Indian Trade Promotion Organization Export promotion Council for Handicrafts

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Wool & Woolen Export Promotion Council Carpet Export Promotion Council All State Emporia Various Councils in India and Abroad Foreign Missions- Indian Embassies etc.

MAIN PRODUCTS
The organization deals in

HANDICRAFTS PRODUCTS HANDLOOM PRODUCTS GARMENTS FLOOR COVERINGS CARPETS LEATHER

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HANDICRAFTS
Handicrafts occupy an important place in the countrys economy as they contribute significantly to the Employment generation and Export earnings. India has a rich history of handicrafts that has evolved over the centuries. In India, it is not an industry but it is a creation symbolizing the inner desire and fulfillment of the community. While handicrafts i.e. Metal ware, pottery, mats or wood-work serve a positive need in the daily life of the people, they also act as a vehicle of self-expression. HHEC has been involved for the past four decades in development and exports of handicrafts utilizing the crafts skills from all over India to create visually appealing and economically suitable products for the world markets. The main products of HHEC are Wooden, stoneware, metal ware, glassware, papier machie, glassware, clay, terracotta, ceramics and their various blends as objects of art and utility.

HANDLOOMS

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Handloom constitutes a timeless facet of the rich cultural heritage of India. As an economic activity, the handloom sector occupies a second place after agriculture in providing livelihood to the people. The element of art and craft present in Indian handlooms makes it a potential sector for the upper segments of domestic as well as global markets. They are considered as an important craft product and comprise the largest cottage industry of the country. HHEC has an exhaustic range of fabrics for dress ware and home furnishing in cotton, silk, wool and various blends. This range includes woven, checks, stripes, textures, dobbies, jacquard, prints, embroideries, Tie & Dye and other embellishments. Design Style-Printed, Woven, Embroidered, Other embellishments & Mix Media.

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GARMENTS
The term Textile is a Latin word originating from the word texere which means to weave. Textile refers to a flexible material comprising of a network of natural or artificial fibers, known as yarn. Textiles are formed by weaving, knitting, crocheting, knotting and pressing fibers together. Indian textile enjoys a rich heritage and the origin of textiles in India traces back to the Indus Valley Civilization. The textile industry is the largest industry of modern India. It accounts for over 20 percent of industrial production and is closely linked with the agricultural and rural economy. It is the single largest employer in the industrial sector employing about 38 million people. The contemporary Indian textile not only reflects the splendid past but also cater to the requirements of the modern times. Knitted garments are extremely popular in the modern fashion scene. Modern design has a major impact on knitwear and made it an exciting area of modern fashion trends. HHEC has state of art production based in Chennai and Delhi. They have exported to some of the leading designer houses and garments importers in the U.S.A., Europe and Japan. Their range includes sports wear, casual wear and formal wear in Cotton, Rayon, Silk, Wool and other blended fabrics. The fabrics used to manufacture garments include all type of fabric used for exports markets mainly using georgette , moss crepe, cotton crepe , rayon , voile and terry voile, polyester fabric for prints and solid colors.

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FLOOR COVERINGS
Pleasing to the eye and soothing for the mind, the floor coverings of India are heart-winners. India offers a wide range of floor coverings that have evolved over the centuries to suit a variety of tastes, climates and budgets. Being mostly export- oriented, the weavers can produce almost any design. HHEC offer a vast collection of floor coverings from every part of India, comprising of:

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Dhuries- Cotton, Wool, Jute (In woven, printed, and tie & dyed designs) Floor Matsare available in cotton chenille and jute blends. Chain Stitched Rugs- are available in wool on cotton base floral, kelim and contemporary design.

CARPETS
Woolen carpets were known in India as early as 500 B.C. References to woven mats and floor coverings can be found in ancient and medieval Indian literature. But the most famous type of Indian carpets, pile carpets came to India in the reign of Akbar in 16th century. The Indian carpets are considered most technically accomplished classical carpets. The carpet weavers over the time have grown artistically. Indian Carpets are renowned for their exquisite designs, elegance, attractive colors and workmanship. HHEC is the pioneer export house which introduces Indian hand woven carpets to the world markets. Their range includes a vast array of designs: Traditional- (in wool and silk) Tribal- (Gabbech) Tufted- (An Indo Nepal Variety)

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LEATHER
Leather tanning as art form reached its zenith in India by 3000 B.C. The earliest skins used were of tiger and deer. This is an old hereditary craft and is probably as wide spread as earthenware. Because of its wide prevalence in the rural areas, much of the tanning is locally done by indigenous methods which are pretty laborious. HHEC range comprises of Gift-ware, Furniture, Office table and Fashion accessories in plain, printed, painted and embossed leather.

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SEGMENT ANALYSIS
The key business segments of the Corporation comprises of Handicrafts (including carpets), Handlooms, Gold Jewelry, Bullion and Others. The geographical segment comprises of inside India and outside India. Rs. In crores) 200405 35.11 8.09 6.46 0.16 49.82 28.36 78.18

2005Products Handlooms Handicrafts Garments Carpets Sub total Jewelry Total 06 33.39 5.27 7.86 0.09 46.61 12.02 58.63 Table no.-1

The above table depicts the Product wise export sales for different products. In the year 2005-06, direct exports amounted to Rs. 46.62 crores as against Rs. 49.82 crores last year and indirect exports amounted to Rs. 12.02 crores as against Rs. 28.36 crores last year. Total exports amounted to Rs. 58.63 crores as against Rs. 78.18 crores.

20

The Corporation also Import goods from different countries. The two main import products are Bullion Bars and Gold Coins which accounts for Rs. 1004.17 crores in the current year as against Rs. 1221.05 crores.

LIST OF MAJOR SUPPLIERS

PRODUCTS NAME OF SUPPLIERS Needa Handicrafts , Agra Verma Handicrafts, New Delhi New Jan Khan & Co., Srinagar Ganpati Creations, New Delhi Adivasi Shilp, New Delhi Raghunath Prasad Creations, New Delhi Hansraj Handicrafts, New Delhi Ibrahim & Co., Srinagar Shameem Handicrafts, Uttar Pradesh Asian Art & Handicrafts, Agra Salman Handlooms, Uttar Pradesh Alfa Handlooms Weavers Industrial Cooperative Society, Srinagar MKS Finance Limited, Switzerland M/S NATEXIS Commodity Markets Limited, England Bin Sabt , Dubai Bhat Cottage Collections, Srinagar Variety Creations, Uttar Pradesh Gadhecha Trading Private Limited, Ahemadabad AaryaVart Impex Private Limited, Ahemadabad Satlon Investment Private Limited, Ahemadabad Solar Trading Private Limited, Mumbai Rukma Industries Limited, Chennai

HANDICRAFT S

HANDLOOMS

BULLION

FLOOR COVERINGS SILVER

LIST OF MAJOR BUYERS

COUNTRY NAME OF BUYERS Naf Naf Boutiques La Petite American Retro Index International Sa La Redoute Sner 3 Suisses

FRANCE

21

HONG KONG DENMARK AUSTRALIA SPAIN ITALY UNITED KINGDOM UNITED STATES OF AMERICA NORWAY

Tolani & Associates Best Seller Wholesale A/S Veromoda Vila A/s Rockmans Bershka Zara Modafil; Sas Top Shop Dorothy Perkins The Burton Group Plc T/A Kiko Clothing Provence Damour LLC Gunther By Nash & Sarin Best Seller A/S Vila A/S

FINANCIAL ANALYSIS
CAPITAL
The Authorized and Paid up Capital of the Corporation remained unchanged at Rs. 20.00 Cr. and Rs. 13.82 Cr., respectively during the year 2005-2006. The entire Paid up Capital has been subscribed by the President of India.

TURNOVER
The Corporation achieved a turnover of Rs. 1065.13 crores in the year 200506 as against Rs. 1302.17 crores in the previous year showing a decline of 18.2%. The decline in the turnover is mainly due to the steep price spurt in international market of bullion imports and also due to spot delivery being desired by local buyers wherein the designated banks have an edge. (Rs. In crores) 2005-06 1784.36 1.52

YEARS TURNOVER NET PROFIT

2003-04 2004-05 1065.13 1302.17 0.64 1.3 Table no-2

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During 2004-05, the Corporation achieved a turnover of Rs.1302.18 cr., against Rs. 1784.36 cr. in the corresponding period last year, showing a decline of 27.0%.The turnover of the Corporation was adversely affected

a) In the core thrust area of exports -

due to the closure of its Tokyo and

New York Offices. During 2003-04, the Corporation had been placed in the Disinvestment mode .This resulted in some of the major buyers leaving the fold of HHEC. The decline in jewelry sales was due to the policy of the local Government. Bullion Imports - due to bullion change in

b) In the opportunity driven business of

imports being placed under OGL.

However, direct exports of crafts and

textiles, which is the core business of 4.25%.

of the Corporation; have increased from Rs.47.78 cr. in 2003-04 to Rs.49.82 cr. during the year, r egistering an increase

TURNOVER FOR DIFFERENT YEARS

2000 1800 1600 1400 1200 1000 800 600 400 200 0 1784.36 1302.17 1065.13 TURNOVER

Amount In Crores

2005-06

2004-05 Years

2003-04

Figure -1

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EXPORTS
In the year 2005-06, direct exports amounted to Rs. 46.62 crores as against Rs. 49.82 crores last year and indirect exports amounted to Rs. 12.02 crores as against Rs. 28.36 crores last year. The exports have declined from Rs. 78.18 crores in 2004-05 to Rs. 58.63 crores during the year showing a decline of 25%. The decline is mainly due to

Reduction in jewelry exports from Rs. 28.36 crores in 2004-05 to Rs. 12.02 crores during the year, having a decline of 57.6% because of the postponement of the jewelry exhibition and

Reduction in direct exports from Rs. 49.82 crores in 2004-05 to Rs. 46.62 crores in 2005-06 because the major buyers of USA was shifting their business to China and Pakistan due to competitive prices offered by exporters from these countries. 2001YEARS EXPORT 02 82.8 200203 200304 200405 78.18 (Rs. In crores) 200506 58.63

103.83 80.88 Table no.-3

The major portions of exports have come from the Handloom sector. However, the Corporation is focusing on other segments as well.

TOTAL EXPORTS OF HHEC

120 Amount in crores 100 80 60 40 20 0 2001-02 2002-03 2003-04 24 Years 2004-05 2005-06 82.8 103.83 80.88 78.18 58.63 EXPORTS

Figure -2

IMPORTS
The Corporation mainly imports two products Bullion Bars and Gold Coins. The imports have declined from Rs. 1221.05 crores in 2004-05 to Rs. 1004.17 crores in 2005-06, showing a decline of 17.8%. Moreover, the retail sales have also declined from Rs. 2.94 crores to Rs. 2.33 crores. (Rs. in crores) PRODUCTS BULLION BARS GOLD COINS TOTAL IMPORT SALES 2005-06 1001.27 2.9 1004.17 IMPORTS OF HHEC 2004-05 1221.03 0.02 1221.05

1400 1200 1000 800 600 400 200 0 2005-06 Years 2.9 1001.27

1221.03

Amount in crores

BULLION BARS GOLD COINS 0.02 2004-05

Figure-3

NET PROFIT
The performance of HHEC from 2001-02 to 2005-06 showed that the Corporation has earned a highest profit of Rs. 301.21 lakhs in the year 200102. YEARS 2001200220032004(Rs. In Lakhs) 2005-

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02 NET PROFIT 301.21

03

04

05 130.39

06 64.18

250.26 152.03 Table no.-5

NET PROFIT OF HHEC

64.18 130.39 301.21 2001-02 2002-03 2003-04 152.03 2004-05 2005-06 250.26

Figure -4 The Company earned the highest net profit in the year 2000-01 because the sales were increased to a greater extent as compared to the cost. However, the Net Profit of HHEC has declined from Rs. 130.39 lakhs in 2004-05 to Rs. 64.18 lakhs in 2005-06 which is mainly due to lower turnover and the high costs. To increase the Net Profit, the Corporation has already initiated a series of activities to re- orient itself to improve performance by development of new samples on traditional crafts and textiles and cutting costs. Moreover, the Corporation should also focus on efficiency improvement of the employees and adequate aggressive marketing policies should be adopted in order to achieve a high turnover which ultimately will increase the net profit.

DIVIDEND 26

Dividends are declared by the Board of Directors on the basis of the net profit in the current year. The company has started paying dividends to the stockholders in the year 1997-98 when it earned a net profit of Rs. 204 crores.Though the Corporation has earned a net profit of Rs. 64.18 lakhs, the Directors has recommended a dividend of 5% (previous year 5%) on the paidup Equity Share Capital of Rs. 13.82 crores.This will absorb Rs.69.1 lakhs including dividend tax and surcharge thereon (Rs. 69.10 lakhs in the previous year).

YEARS DIVIDEN D

200102 276.4

200203 276.4

200304 69.1

200405 69.1

(Rs. In lakhs) 200506 69.1

Table no.-6

DIVIDEND OF HHEC
300 250 200 Am ount in Lakhs 150 100 50 0 2001-02 2002-03 2003-04 2004-05 2005-06 Years Figure -5 69.1 69.1 69.1 DIVIDEND 276.4 276.4

Figure-5

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GROSS SALES
During the year 2005-06, the corporation has achieved gross sales of Rs. 1065.13 crores as against Rs. 1302.17 crores in the previous year. The following table shows the Gross Sales from the past five years.

EXPORTS IMPORTS DOMESTI C TOTAL

2000-01 81.83 342.24 2 426.07

200102 82.8 247.89 3.25 333.94

200203 103.83 284.41 2.27 390.51

200304 80.88 1701.01 2.47 1784.3 6

200405 78.18 1221.06 2.94 1302.1 8

(Rs. in Crores) 200506 58.63 1004.17 2.33 1065.13

Table no.-7

GROSS SALES OF HHEC

1800 1600 1400 1200 1000 Amount in Crores 800 600 400 200 0 200001 200102 200203 200304 200405 200506

EXPORTS IMPORTS DOMESTIC

Years

Figure -6 28

FINDINGS IN FINANCE DEPARTMENT

While working in the Finance Section of the Corporation, I found out that the Corporation is doing well in general. This can be further explained on the basis of the following ratios:

FINANCIAL ANALYSIS FOR HHEC ON THE BASIS OF RATIOS

RATIOS CURRENT RATIO QUICK RATIO FIXED ASSETS TURNOVER RATIO TOTAL ASSETS TURNOVER RATIO TOTAL DEBTS TO TOTAL ASSETS PROFIT MARGIN ON SALES RATIO INVENTORY TURNOVER RATIO 2005 1.0247 1.0182 136.64 5 2006 1.189 1.1425 105.71 5

1.28% 11.32% 1.1061 0.4737 201.43 0.1493 0.5606 328.92 6

CURRENT RATIO
Current ratio is calculated by dividing Current Assets by Current Liabilities. The current ratio is more in the year 2006 as compared to 2005 because the company has purchased a lot of inventories in 2006.High current ratio indicates that the liquidity position of the company is very strong. The Corporation continues to be adequately liquid and expects that this will help them to achieve its growth objectives. From the point of view of supplier, this is good for the company because the greater the current ratio, the greater the company is in a position to pay off it creditors. The Current ratio provides the best single indicator of the extent to

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which the claims of short-term creditors are covered by assets that are expected to be converted to cash fairly quickly.

CURRENT RATIO
1.189 1.2 1.15 1.1 Values 1.05 1 0.95 0.9 2005 Years 2006 1.0247 CURRENT RATIO

Figure -7 QUICK RATIO

Quick ratio is calculated by deducting inventories from current assets and then dividing the remainder by current liabilities. Inventories are typically the least liquid of a firms current assets; hence they are the current assets on which losses are most likely to occur in a bankruptcy. The company has a high quick ratio as compared to the previous year. This is good for the company because it means that the company can liquidate its inventory and can pay off its current liabilities easily. The company is disposing off its inventory efficiently.
QUICK RATIO 1.1425 1.15 1.1 Values 1.05 1 0.95 2005 Years 2006 1.0182 QUICK RATIO

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Figure -8

FIXED ASSETS TURNOVER RATIO

The fixed assets turnover ratio measures how effectively the firm uses it plants and equipments. HHEC has a fixed assets turnover ratio of 105.715 % which means that the firm is not using its fixed assets as extensively as it was using in the previous years. One possible reason for low fixed assets turnover ratio is that the company has purchased a lot of fixed assets in this year. Therefore, the company has to take appropriate necessary steps to increase the fixed assets turnover ratio.

FIXED ASSETS TURNOVER RATIO

136.645 140 120 100 Values 80 60 40 20 0 2005 Years FIXED ASSETS TURNOVER RATIO 105.715

31
2006

Figure -9 TOTAL ASSETS TURNOVER RATIO

The total assets turnover ratio measures the turnover of all the firms assets and it is calculated by dividing sales by total assets. HHEC ratio is more than the previous year which indicates that the company is generating a sufficient volume of business given its total assets investment. This is actually good for the company because the company has purchased a lot of fixed assets in the current year and still, the company is generating a sufficient volume of business.
TOTAL ASSETS TURNOVER RATIO

12.00% 10.00% 8.00% Percentage 6.00% 4.00% 2.00% 0.00% 2005 Years 1.28%

11.32%

TOTAL ASSETS TURNOVER RATIO

2006

Figure -10 TOTAL DEBTS TO TOTAL ASSETS

The ratio of total debt to total assets, generally called as the debt ratio, measures the percentage of funds provided by creditors. The debt ratio is very low as compared to the previous year because the company has paid off its debt Creditors prefer low debt ratio because the lower the debt ratio, the greater the cushion against creditors losses in the event of liquidation. This is actually good for the company because it can borrow additional funds

32

without raising its equity capital and creditors may be reluctant to lend the firm more money.

TOTAL DEBTS TO TOTAL ASSETS

1.2 1 0.8 Values 0.6 0.4 0.2 0

1.1061

0.1493

TOTAL DEBTS TO TOTAL ASSETS

2005 Years

2006

Figure -11 PROFIT MARGIN ON SALES RATIO

The profit margin on sales ratio is calculated by dividing net income by sales. HHEC profit margin is more than the previous year which means that the companys cost was not too high in relation to sales. This shows that the company is operating efficiently and is utilizing the resources very well. Moreover, the firm with a high profit margin might end up with a low rate of return on its stockholders investment. Therefore, high profit margin is actually good for the company.

Figure -12 PROFIT MARGIN ON SALES RATIO

0.5606

0.58 0.56 0.54 0.52 Values 0.5 0.48 0.46 0.44 0.42

0.4737

33
2005 Years 2006

PROFIT MARGIN ON SALES RATIO

INVENTORY TURNOVER RATIO

The inventory turnover ratio is calculated by sales divided by inventories. The HHEC turnover ratio is more in the current year as compared to the previous year which indicates that the company is disposing off it inventory very effectively. Though the company has purchased inventory in 2006, still its inventory turnover ratio is high which means that the company is not holding too much inventory. Excess inventory is unproductive and it represents an investment with a low or zero rate of return. This shows that the company can easily liquidate its inventory and can pay off its creditors easily. This is actually very good for the company.

Figure -13
INVENTORY TURNOVER RATIO 328.926

350 300 250 200 150 100 50 0 2005 201.43

Values

INVENTORY TURNOVER RATIO

Thus, on the basis of the above ratios, we can conclude that overall the Corporation is doing well. However, there are some areas where the Corporation should focus on and should take appropriate steps in order to increase the total turnover and net profit.
Years

2006

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S.W.O.T ANALYSIS
The Strengths, Weaknesses, Opportunities and Threats (S.W.O.T) of the Corporations are as follows:

STRENGTHS AND WEAKNESSES

STRENGTHS Six branches in India and 18 agents in foreign countries. INFRASTRUCTURE Offices and retail outlets at premium locations in Delhi, Mumbai, Chennai and Kolkatta. Procurement centers all over India.

Control competitive production

over

sampling, procurement, and in the

monitoring inspection through

TRADE RELATED SKILLS

quality handlooms

procurement centers. Range of sample collections of the past in handloom fabrics & made-ups. Control over manufacturing in

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garments. Over 45 years in the trade of development & exports. BRAND EQUITY Customer base who have been dealing for many years. Brand name Sona in India. Glorious past associated in bringing names like Pashmina, Carpets, Moradabad brass to the world map.

registered in Italy & applied for

WEAKNESSES

BUSINESS OBJECTIVE

Selectivity & focus is needed the focus attention continues to be on locations rather than products / markets

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Lack of professionals in the strategic areas of design development, technical,

marketing and finance. UNSKILLED MANPOWER Motivation of staff Revised Performance Linked Reward Scheme under implementation. Need for rationalization across its of

manpower

trade

activities through training & redeployment. LACK OF CONTROL OVER MANUFACTURING Lack of built-up facilities for manufacturing / finishing high value items like made-ups, fashion accessories etc. No direct control on

manufacturing in handicrafts.

OPPORTUNITIES AND THREATS

The various opportunities for H.H.E.C are as follows:

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 GLOBAL MARKET GLOBAL COMPETITION

Export markets are showing signs of revival. Quotas on textile items

THREATS

dismantled w.e.f. 1.1.2005 Different countries are thereby providing wide positioning themselves in opportunities for export of specific product-lines and textile and garments. imitate machine made products crafts. Setting upofof a new unit at Noida, to capitalize/ reverse the decline in growth and tap Competition from the opportunities available on manufacturer/ exporter who dismantling of quotas. have control over manufacturing / finishing.

MANUFACTURING UNITS- GARMENTS

INDUSTRY STRUCTURES

BUYING AGENTS

Appoint buying agents who has the In-house skills to Competition from private players perform inwho have a like product lines lean structure and flexible policies. Carpets, Jewelry & Furniture.

OPPORTUNITY DRIVEN BUSINESS

Sustain the opportunity driven business available under the EXIM Policy, viz., imports of bullion and exports of jewelry.

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MARKETING STRATEGY
The most important component for every organization is the marketing strategy which may be defined as the pattern of plan that integrates an organizations major goals, policies and actions sequences into a cohesive whole. A well formulated strategy helps to allocate the organizations resources into a unique and visible posture based on its relative internal and core competencies.

The target market for HHEC are the group of people towards whom the corporation intends to market its goods, services or ideas with a strategy designed to satisfy their specific needs and preferences. The special emphasis in its effort remains primarily on the development of strategies that will best match the product offering to the needs of particular target segments. An appropriate match between such offerings and needs is vital to the firms success. The Marketing Mix is the blending of four strategic elements Product, Place, Price and Promotion to satisfy chosen consumer segments. It is one of the most fundamental concept associated with the marketing process and is well understood by most modern marketers. A firms marketing effort must always aims at providing customer satisfaction. If a firm offers the right product at the right price, right place and with right promotion, then the marketing programme is bound to be effective and successful. The firm must design an effective coordination of these four basic elements keeping in mind its available resources. HHEC has been working since four decades to nurture and organize the different schools of craftsmanship. Its creations comes in ethnic vibrant

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colors and has been expanding its resource base by connecting itself to more and more artisans, weavers and master craftsmen in rural areas. It offers a wide range of products like Wooden / Iron Furniture, Metal-Bronze, Iron, Brass, Copper & Silver, Stone-Marble, Soap-Stone, Granite, Jewelry- Gold, Silver & Costume, Paper Machie, Glassware, Leather Garments, Carpets, Rugs and Durries.

MARKETING PROBLEM
In the marketing department, I found out that the major marketing problem for the corporation is that it does not get enough buyers for its products. HHEC act as a middleman between the manufacturers and the buyers. They are treated as traders because they manufacture only Garments. They do not manufacture the other products. As a result, the buyers prefer manufacturers because of two reasons: a) They can get the products at a cheaper price. b) They can purchase in bulk and will be assured of its quality. For these reasons, buyers travel to remote areas in search of manufacturers. However, to solve this problem, HHEC has been making special efforts in order to satisfy the buyers needs and demands.

MY RECOMMENDATIONS
Apart from this, I would like to recommend the Corporation to adopt aggressive marketing strategies of market penetration. It should

Participate in leading fairs and exhibitions in India & abroad in order to advertise, create new buyers and strengthen relationship with existing buyers.

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Organize Stand Alone Exhibitions and events abroad to promote the HHECS product lines.

Generate tremendous demand, response and win confidence of foreign buyers through its fairs and exhibitions abroad which will ultimately provide a synergetic platform to various production houses to showcases their masterpieces.

FINANCIAL PROBLEMS
The Handicrafts & Handlooms Exports Corporation of India Ltd. Is a Central Public Sector Undertaking under the administrative control of the Ministry of Textiles, Government of India. It does not have any financial problems as such because all the funds are being generated by the Government of India. However, for certain products, it takes orders from buyers and purchase products from different manufacturers on either credit or consignment basis. However, the pricing strategy of the Corporation is very significant. Pricing is a very critical decision in every organization. After meeting all the costs involved, the sales revenue generated must yield a surplus before there can be profits. The sales revenue figures is however, materially affected by the price charged. If the price is too high, the sales generated are likely to be low. Therefore sound-pricing policies must be adopted to ensure that the organization secures satisfactory profits. However, in pricing decisions, economic concepts are useful. One has to consider various factors which influence pricing apart from costs such as competitive environment and governmental control where applicable. The price of the product materially affects the demand for product planning. For example, if the quality of the product is to be improved, this may be

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possible only if the customers are willing to pay a higher price for it. While setting the price, the organization keeps in mind the following points: Objectives of the organization Customer characteristics Economic product characteristics Competitive environment Distribution channels Cost of profitability

MY RECOMMENDATIONS
Since the entire funds are being generated by the Government of India, the organization does not have any financial problem as such. However, based on my findings, I would like to recommend the organization to bridge the information gap between the buyers and sellers which will ultimately shift the Corporations emphasis on profitability of operations. It should also

Have a positive approach to pricing and should make all possible efforts to get orders Adopt the marginal costing policy for pricing

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SCENARIO ANALYSIS
The Scenario Analysis exhibits the Current position of the

Organization and tells us about the future goals of it. It also shows how effectively and efficiently the Organization is moving towards its goals. Currently, the focus of the Corporation continues harmonious towards maintaining a commercial activities.

blending of its developmental role with

As in the past, the Corporation continues to play a vital role in the promotion of Indian Handmade crafts like fashion accessories. As part of innovation and to provide inputs, training and marketing undertaken the fabrics for Textiles and Crafts including textiles based

support to artisans/weavers, the Corporation had following projects for development of silk and silk blended dress material and home furnishing

Development of craft clusters at Saunsar (Chindwara, M.P.) and Baraseoni (Balaghat, M.P.). Development of the craft cluster at Sonepur and Bhubaneshwar (Orissa), for the development of Tie & Dye Ikat fabrics in designs

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acceptable to the international traditional Iket motifs.

market, thus moving away from the

Development of the craft cluster of Vanya Silk and Bivoltine Silk in Uttaranchal.

With a view to marketing of new samples developed on traditional crafts and textiles and its policy of upgrading knowledge on designs and fashions abroad, the Corporation participated in a number of International fairs, viz.., Heim- Textile (Frankfurt- Germany), Indian Home Furnishing Fair (Osaka, Japan), India Garment Fair (Osaka- Japan), Formland Fair (Denmark), International Autumn Fair (Birmingham) and India Trade Fair (Mauritius). The Corporation has participated in domestic fairs like Textile India, IHGF, India Pavilion at Aichi (Japan) and displayed jewelry, handmade crafts and textile items. The Corporation also organized a Stand Alone Exhibition at Sydney (Australia) wherein wooden crafts and furniture, carpets etc. were displayed. Moreover, the Corporation has been practicing the principle of good corporate governance and focusing on in the future also. The Board lays strong emphasis on transparency, accountability and integrity. The Vigilance Division also continued to perform the function of creating consciousness of the Vigilance requirements among the employees. During the year, the corporation observed Vigilance Awareness Week from 1st November to 6th November 2006 and conducted seminars to highlight the harmful effect of corporation. The Corporation has also focused on the Personnel and Industrial Relations. With a strong commitment to the organization and willingness to work wholeheartedly towards achievements of the goals, the HHEC team has played a pivotal role in its success. The Directors wishes to place on record its appreciation to the contribution made by all employees in achieving the performance during the year.

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The Industrial as well as employee relations during the period under review continued to be peaceful and harmonious. The Corporation lay due emphasis on all round development of the human resource through training, redeployment and motivation. There was no employee of the company who received remuneration in excess of the limits. The Corporation also follows the Government directives relating to reservation of posts for the Scheduled Castes, Scheduled Tribes and other Backward Classes. As per the latest orders, the Corporation maintains the post-based roasters. During the year, any post meant for these categories has not been de-reserved. Moreover, the Corporation still continued to promote progressive use of the official language Hindi for official work and to ensure implementation of the official language. In order to motivate the employees to use Hindi in official work, various incentives in cash and kind are granted. The Corporation organized City level Chitra Abhivyakti Hindi Competition on 26th October 2006 under the banner of NARAKAS. The competitors from twenty five Public Sectors participated in the event. The Corporation was also awarded shield as organizer Corporation. The Corporation observed Hindi Pakhwarato encourage the use of Hindi by every employee in the day-to-day working of the Corporation.

PERSPECTIVE PLANNING
HHEC is a Government based organization whose main aim is to market the products of Indian Crafts and skills abroad which ultimately provides the marketing channel for craftsmen and artisans. In order to fulfill its aim, they are planning to take the following steps:

In order to increase the Exports of Handicrafts and Handlooms products, the Corporation has been making efforts to rein in new buyers from the existing markets as well as from the untapped markets. Besides participation in major international and local fairs,

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the Corporation has also proposed to organize Stand Alone Exhibition in USA, Kuwait and Brussels. With a view to provide design inputs, training and marketing support to artisans, the Corporation has proposed to undertake projects on Design and Development of cane and bamboo from North East and ornamental crafts including jewelry items from North East. After the closure of New York and Tokyo offices, in order to retain their presence in these markets and further development of business in other potential areas, General Sales Agent have been engaged during the year for USA, Japan, Germany and Canada markets.

The Corporation has also proposed to set up a manufacturing unit at Noida complex with CAD/CAM facility in order to focus on hi-fashion garments, fashion accessories and made-ups developed through free lancer designers for value turnover.

During the year, the Noida complex was inaugurated in order to affect economies on the operational activities, marketing division of corporate office including the Showroom and Delhi branch have been merged and started functioning from the Noida complex.

Apart from the following steps, since, imports accounts for the majority of the total income, the corporation is emphasizing more on the major segments like Handicrafts, Handlooms, Garments and Jewelry. The basic strategy of the corporation is to develop new and innovative products. They have planned

46

To increase the contribution of Handicrafts in the total exports i.e. from 8.98 % to 10% by the year 2007-08. To increase the contribution of Handlooms from 56.98% to 80% by the year 2007-08. To increase the contribution of Garments from 5 % to 7.3 %.

HANDICRAFTS SEGMENT
In order to increase the contribution of Handicrafts, the Corporation is planning to Enroll associates of Master artisans & Craft persons in order to develop a new supplier base.

Establish warehouses in various foreign countries and to open up more display showrooms in Noida in order to operate on consignment basis. Concentrate more on the European, South East Asian, and Australian markets. Focus adequately on other growing categories like fashion accessories, gifts and utilities, furniture etc.

HANDLOOM SEGMENT
In order to increase the contribution of Handlooms, the Corporation is planning to Diversify range in made-ups to enable focused marketing of table linen, bed linen, floor coverings, etc.

Shift its focus from cotton fabrics for apparel end-use to designing dress materials in silk, blends etc.

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Utilize efficiently on the opportunity available on dismantling of quotas by product development, cost, quality and time performance. Diversify market coverage from USA, Japan and France to Germany, U.K., Latin America and Australia.

GARMENTS SEGMENT
In order to increase the contribution of Garments in the total exports, the Corporation is planning to

Explore the possibility of entering into a Joint-venture with a Foreign Collaboration. Focus mainly on simple garments like shirts, shorts etc. for volume turnover.

Increase the focus on USA and Australian markets. The Modern unit at Noida (U.P.) should focus primarily on Hi-fashion garments for value turnover selectively work with free-lancer designers from India and abroad, collaboration with NIFT, etc.

JEWELRY SEGMENT
The Jewelry segment plays a vital role in the total turnover of the Corporation. In order to increase its contribution, the Corporation is planning to Sustain the opportunity driven business of Jewelry Exports & Bullion Imports.

CARPETS SEGMENT
The Carpet segment also plays a major role in the total turnover. In order to increase its contribution, the Corporation is planning to

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Sell the stock on consignment basis especially in the proposed warehouses of U.S.A. / Canada & the display showroom located in Noida.

Evolve its role in the carpets to that of buying agent over the next few years.

The Corporation is also focusing on the other growing categories like fashion accessories, Gifts and utilities etc. They are also planning to establish a domestic warehouse at Noida and operate on consignment basis for retail sales of items like furniture, carpets etc.

IDENTIFIED PROBLEMS OF RESEARCH

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After studying the Corporation in detail, I identified two main problematic areas 1) The National Museum Shop & 2) The Crafts Museum Shop However, the HHEC Souvenir Shop acts as a major strength for them in order to cover up these problems.

THE NATIONAL MUSEUM SHOP

The National Museum Shop in New Delhi is the largest museum in India. It holds variety of articles from pre-historic era to modern works of art. It is run by the Ministry of Culture, Government of India. The National Museum displayed the excavations of the different

civilization.The museum has in its possession over 200,000 works of art, of both Indian and foreign origin, covering more than 5,000 years of Indian cultural heritage. Their rich holding of various creative traditions and discipline represents a unity amidst diversity, an unmatched blend of the past with the present and strong perspective for the future. The HHEC Shop at National Museum is built in a very strategic and prominent location. However, I found out these following problems. a) The shop is in an ideal location but it is very poorly maintained. There is dust on most of the displayed items. b) Not only the shop is poorly maintained but it is also much suffocated. There is no proper air ventilation as there is only one window and the air conditioner is also not working properly.

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c) The collection of books is very poorly displayed. No section has been

maintained for similar kinds of books due to which it becomes very difficult for the buyers to find a book of their choice. d) Apart from some handicrafts and handloom products, no other segment products are displayed.

THE CRAFTS MUSEUM SHOP

The Crafts Museum complex is a charming oasis in the midst of the hustle and bustle of Delhi. Mud huts with painted walls and thatched roofs, courtyards, terracotta horses recreating village shrines, craftsmen at work are some of the elements that add to the rural ambience of the place. Within the museum itself are examples of traditional Indian crafts, Wooden Carvings and Images, Metal ware etc. which includes clay and terracotta pots, toys and images, folk and tribal paintings, jewelry and textiles. The core collection of the Crafts Museum was actually put together to serve as reference material for the craftsmen who were increasingly losing touch with their own traditions in terms of materials, techniques, designs and aesthetics of their arts and crafts due to the sudden changes caused by modern industrialization. The Crafts Museum shop gives the craftsmen an opportunity to confine to his tradition or to innovate in response to his new contemporary environment. Since the Crafts Museum shop is located in Pragati Maidan, it faces a lot of problems which are as follows:

a) The majority of the sales take place only when there are some fairs.
During the rest of the period, the sales are very minimal.

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b) The Crafts Museum shop is also poorly maintained. There is a lot of dust on almost each and every item displayed. c) The shop is very much suffocated as the air conditioners are not functioning properly and the fans kept there does not solve the problem of heat. d) The product displayed does not include home furnishing, jewelry and garments. The foreign customers specially ask for these products. e) The products are not displayed in an efficient manner. There is no sequence of products which leaves a bad impression on the buyer.

THE HHEC SOUVENIER SHOP

Situated in the heart of Delhi, the unique Dilli Haat is an upgraded version of the traditional weekly market, offering a delightful amalgam of craft, food and cultural activities. Spread over a spacious six acre area, imaginative landscaping, creative planning, and the traditional village architectural style have combined to produce the perfect ambience for a Haat. Dilli Haat transports you to the magical world of Indian art and heritage presented through a fascinating panorama of craft, cuisine and cultural activities. It has a wide variety of skillfully crafted handicrafts intrinsic to each part of the country. These range from intricate rosewood and sandalwood carvings, embellished camel hide footwear, to sophisticated fabric and drapery. The Handicraft stalls are allotted on a rotational basis to craftsmen from all corners of the vast and varied land of India. Shows promoting handicrafts and handlooms are held at the exhibition hall in the complex.

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The HHEC Souvenir shop at Dilli Haat is very ideal because the foreign tourists visit these shops very often. The shop has a total turnover of Rs. 1.36 crores in the year 2006-07 as compared to Rs. 1.05 crores in the previous year. While allowing free interaction between buyers and sellers, the Corporation favors a check on prices regularly to keep them moderate. The HHEC shop acts as a major strength to cover up the problems, however, it also needs some modifications. a) The HHEC shop at Dilli Haat is very small and the products are not well displayed due to lack of space. b) The shop requires at least one air conditioner to make the temperature in side the shop comfortable.

CONCLUSION
Based on my internal scanning of the Corporation, I came to the conclusion that for HHEC to become a successful organization, the

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crafts should be re-developed with modern technology. Therefore, following steps should be taken:

The Artisans should be taught modern techniques to produce their products. With the introduction of improved labor saving techniques, tools and appliances to them, they can have a high turnover.

The Indian craftsmen generally produce objects of traditional designs but it should be re-designed or some changes should be brought in order to compete with the machine made products which are comparatively beautiful and less costly. A craft can only compete with the machine made products in the international market if the designs are improved. But the improvement in designs should be made without sacrificing the traditional qualities and the artist standards of the raft objects. The craftsmen should retain the old and blend it with new things of their own invention.

The standard of living of the Craftsmen should be raised. Currently, their earnings are not sufficient enough to provide them with the basic requirements. They are mostly illiterate and live in unhealthy places. To ensure a better deal from the craftsmen, the whole structure of production has to be reorganized which will lessen the domination of dealers, financers, and middle men.

The crafts of a country can flourish only when the raw materials used by the craftsmen are available to him at reasonable and concessional prices. Therefore, it is suggested that the distribution of the raw materials should be done through the state governments. Special efforts need to be made so that the raw materials are available to the craftsmen on time.

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The future of Indian Crafts depends on the popularization of craft products among both the masses at the national and international level. Therefore, more utility articles should be produced at a cheaper rate. As a result, wider publicity should be done through newspapers and journals. Apart from this, the Central and State Governments should also take appropriate steps in arranging exhibitions and fairs.

Various promotional schemes should be developed in order to promote the Indian Crafts. The Government should provide financial and technical support to various institutions like The Handicrafts and Handloom Export Corporation of India, The State Industries Department etc. who are closely associated and concerned about the functioning and development of crafts in different parts of the country.

The Corporation should also focus on an effective export programme. For this purpose, proper advertisement is required and adequate funds should be invested. Films on Indian Handicrafts should also be shown in foreign countries. Moreover, the corporation should also develop special products that really portray the cultural heritage of India.

For the development of crafts, the individual craftsmen should be given better credit facilities. They should be allowed to avail loans from various banks which help them for their working capital requirements.

The Corporation should focus on the re-orientation of the Craft traditions. With the impact of modern civilization, significant changes have taken place in the aesthetic value of the people. Majority of the people does not want ornamented crafts. They require simple and well designed objects of utility which are inexpensive and handy. To satisfy the modern needs, the traditional designs should be improved. The revival of these craft traditions should, however, be undertaken in the

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light of modern requirements and taste. Moreover, the government should patronize and give recognition to the skilled craftsmen who have produced great works of art which will ultimately motivate them.

The Corporation should also focus on the appropriate marketing and promotion of Exports. The rate of growth in the exports of craft products is very significant as compared to the total exports of our country. The share of exports of craft products in the total exports of our country has also increased in the recent years and crafts have become one of the important export items. For the promotion of exports, the crafts goods should be marketed appropriately through exhibitions, fairs and brochures.

Apart from re-designing and re-orientation of the Indian Crafts, special concessions should be provided by the Government in the Handloom and Handicrafts sector.

The Corporation should also take steps to provide better technical guidance to craftsmen which will enable them to understand the finer details of quality production, tools and technological infrastructure which will help them in designing and processing of their products.

Lastly, the Corporation should re-formulate its policies keeping in mind the current market situation.

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RECOMMENDATIONS
Based on the detailed study about the Corporation, I would like to recommend the following points which will benefit the organization:

1) The Corporation should Re-orient the policy of Procurement with the

main focus on source buying by establishing strong and direct links with artisans and craft-persons. 2) The Corporation should avail up discount on price through prompt payments.

3) They should also take steps to upgrade the existing website with latest
catalogue for advertisement and enquiry/order generation as this will give adequate information to foreign buyers.

4) They should also focus on controlling and managing the cost of people
through re-structuring solution in order to achieve the industry norms.

5) Induction of officials in the key functional areas of design development

and marketing trade functions is also required. This will lead to better and improved designs and effective trade between the manufacturer and the organization.

6) They should re-organize the workforce through proper training and skill
based job allocation in order to make them more efficient.

7) They should also give ample opportunities to craftsmen and artisans so

that they can have greater exposure and should have the access to

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national and international markets thereby giving them a better livelihood for more sustainable developments.

8) They should appoint more buying agents who possess the in-house
skills in product lines such as Jewelry, Furniture and Carpets. Since, the Corporation is planning to set up more showrooms; these buying agents will prove very beneficial for them.

9) The Corporation can also have a Color Forecast link on its website
which provides the future design and color directions of fashion and home furnishings for domestic and international markets. As a result, small apparel and furnishing manufacturers, exporters, domestic textile traders and producers will respond adequately and in a timely fashion to market requirements. 10) They should also try to maintain and build good social relations

with the buyers as well as with the manufacturers of different segments like handicrafts, handlooms, carpets, garments etc.

11) The Corporation should take possible steps to publicize its products in
the popular periodicals and magazines. This will leave an impression on the mind of the customers who read them frequently. This ultimately will increase the customer base for its products.

SPECIAL RECOMMENDATIONS THE NATIONAL MUSEUM SHOP

1) The items should be displayed in such an attractive way that it should catch the attention of the buyers at once.

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2) The displayed items should be cleaned regularly and should not have dust on it.

3) Proper air ventilation with adequate air conditioners and windows are
necessary to make the shop a comfortable place for buyers and foreign tourists.

4) There should be products of other segments apart from only

Handicrafts and Handloom products. These include garments, home furnishings and jewelry as these are in great demands by the foreign tourists. 5) Different variety of Handicrafts and Handloom products should be added to the collection.

6) Finally, the collection of books should be appropriately displayed.There

should be different sections for different kinds of books so that the buyers can locate it easily.

THE CRAFTS MUSEUM SHOP 1) Firstly, the interiors of the shop should be highly appealing to the
customers. For this purpose, the exhibits should be displayed to attract the attention of the customers. 2) The Crafts Museum Shop is very small. Therefore, its area should be increased as it will give a new and pleasant look to the shop.

3) The displayed items should be cleaned regularly from time to time. It

leaves a very bad impression on the buyers if there is dust on displayed items.

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4) The problem of air conditioner should be immediately solved. Proper air ventilation is required as the shop attracts a majority of foreign tourists. 5) Finally, different section should be made for different products like garments, home textile, home furnishings and jewelry.

THE SOUVENEIR SHOP AT DILLI HAAT 1) The area of HHEC shop at Dilli Haat should be increased in order to
accommodate more customers and to display the products in an effective way. The outlet should be spacious to move around freely.

2) The Dilli Haat shop of HHEC does not have the collection of books.
Books are always appreciated by the foreign customers and efforts should be made to display the books.

3) The shop does not have proper air ventilation. The experience of
visiting HHEC shop at Dilli Haat should be a pleasant one but high temperature inside the shop plays the opposite.For this purpose, the problem of air conditioner should be immediately looked into.

4) Another way to increase the sales is by the hospitality of the staff

member present at the shop. For this purpose, adequate training from time to time should be imparted to the staff members.

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BIBLIOGRAPHY
WEBSITES 1) www.hhecworld.com( March 12,13,15,18,19,20,21 and April 5, 12,13,18) 2) www.ministryoftextiles.com( March 13,14,15 and April-7,8) 3) www.craftsinindia.com/arthistory( March 18,19,26,27 and April 1,2,3,7,10) 4) www.crafts-wikipedia.com( March 18,19,20 and April 3,4,5) 5) www.indianartsandcrafts.com( March- 29,30 and April 1,2,3,4,6,8) 6) www.google.com( March 15,16,17,18,20,22,24,25,26,29,30 and April- 4,5,9) 7) www.dillihaat-wikipedia.com( April 2,3) 8) www.nationalmuseumofindia.com( April 5) 9) www.craftsmuseum.com( April 7,8)

BOOKS 1) Annual Report 2005 -06 2) Annual Report 2004-05

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