THE UN-ORGANIZED SECTOR & CLUSTER DEVELOPMENT

AS BUILDING BLOCKS OF GROWTH POLE

Source: Growth Pole Programme For Unorganized Sector Enterprise Development,

NATIONAL COMMISSION FOR ENTERPRISES IN THE UNORGANISED SECTOR, 2009

Metro & Regional Planning Assignment: Nimisha Samadhiya

 “The unorganised/informal sector consists of all
unincorporated private enterprises owned by individuals
or households engaged in the sale and production of
goods and services operated on a proprietary or
partnership basis and with less than ten total workers”.
• On the basis of 2004-05 National Sample Survey data,
the National Commission estimated that about 92 %
(422 million) workers were in the informal/unorganised
economy.
• Further, it was estimated that more than 55 % of India’s
workforce reports itself as self-employed in the
enterprises comprising 1-6 persons in the unorganised
sector.
• Unorganised sector enterprises face several problems,
all linked to the asymmetries of the markets.
I. information related problems of product markets
linked to demand-side problems
II. distortions in input markets linked to supply-side
problems
III. financial problems linked to asymmetries in credit and
capital markets
IV. labour market problems linked to inadequate skills
V. technology related problems linked to its access and
adaptation, etc.
Common Minimum Programme (CMP) of the
United Progressive Alliance (UPA) identified
the need to enhance the welfare and well
being of workers in the unorganised sector
GOI constituted the National Commission for
Enterprises in the Unorganised Sector (NCEUS) in
September 2004 as an advisory body and a
watchdog for the informal sector
Synchronizing with existing policies the NCEUS
proposed up-scaling of cluster development
through Growth Poles
Preparation of DPRs of the pilot growth pole
projects in six states:
Sikandra in Rajasthan, Domjur and Panchla in
West Bengal, Kollam in Kerala, Chamoli in
Uttarakhand, Champa and Janjgir in
Chhattisgarh, South-Western Kamrup in Assam
NCEUS Approach to Growth Poles
The NCEUS has proposed pilot projects for ‘growth poles’ applying the PURA principles (solutions to a number of
problems that afflict rural India such as unemployment, isolation from markets, lack of connectivity and migration to
cities). The objectives are to expand production and employment in the unorganised enterprises around existing clusters
of industrial activities and services as well as encourage the formation of new clusters.

OBJECTIVES SELECTION CRITERIA

i. The exact identification of the locations of the clusters
The objectives and the strategy of the growth pole
would be worked out through intensive consultations by the
programme can be summarized as follows:
state governments in consultation with the concerned
i. Expand the production and employment in the
ministries and various stakeholders.
unorganised enterprises in clusters around select
ii. Existing informal clusters with the highest potential may
existing clusters of micro enterprises and services.
be chosen to create linkages among themselves within the
ii. Encourage formation of new clusters of micro
area chosen. Clusters may be selected by taking into account
enterprises based on potential economic activities
the existence of critical gaps (in respect of technology,
in the region.
networking, quality, common facilities, etc.), viability,
iii. Integrate these unorganised units with the
promotability, socio-environmental conditions, replicablity
mainstream of the process of economic growth
and scope for synergy.
through the creation of markets and the use of
iii. Existing clusters that come under one or other of the on-
market-related incentives with promotional
going cluster development programmes run by different
assistance of the government.
ministries/ state government could be taken up, so as to
iv. Spread enhanced economic activities and
initiate concerted efforts. Multiproduct, multi-service
industrialization throughout the country, outside
clusters could be considered on priority to synergies effects
the large industrial areas/clusters.
in the growth poles.
The preparation of DPR involved survey of growth pole area, mapping and collection of village-wise and sector wise
data, field visits, interactions with the stakeholders, consultation with state government and preparation of
an Inception Report followed by the DPR.
Broadly a cluster of enterprises may be defined as a typical geographical concentration of micro, small, medium and
large firms producing same or similar range of products (goods or services).

NCEUS is of the view that the deficiencies experienced in cluster development approach could be overcome by
adopting the approach of “Growth Pole”, which could also be termed as ‘Cluster of Clusters’. The implementation
of Growth Pole concept will not only address the weaknesses of cluster development approach, but also bring
additional micro and macro benefits. It will also help in making clusters more vibrant and a dynamic tool of
backward area development and is considered more appropriate for the development of unorganised sector
enterprises.

The growth pole concept besides promoting the existing sectors/ activities, aims at adding new areas of growth
within the growth pole region, thus bringing improvement both at micro and macro levels and brings out better
convergence among developmental programs and agencies in the region and also development of infrastructure
in the region at a much bigger scale than in a cluster.

The approach has the added advantage of bigger market network and brings into fore a host of social and cultural
changes in the area and bridges the gaps which exist in the cluster development program.
Sikandra Growth Pole (Rajasthan)
District- Dausa Area- 1250 sq. km
(approx.) Population- 5.1 lakhs
The growth pole area covers 361 villages
within the area & 3 tehsils of Sikrai,
Baswa and Dausa. High seasonal
migration of semi skilled and unskilled
people moving to the cities and other
locations for employment in the
construction sector. Stone-cutting and
carving, and carpet weaving are the
significant sectors in the project.
Present situation: constrained growth
due to lack of organization to undertake
large scale work, lack of linkages with the
market and on non-availability of basic
tools because of lack of resources.
Impact of growth pole intervention:
o Development of existing enterprise
clusters such as stone carving, carpet,
leather, woods, pickle making, etc.
o Developing other areas of local
potential such as, dairying and tourism
and making linkages & synergies.
o Attracting new enterprises /industries
through industrial plans.
o Provision of enabling infrastructure and
policy support for overall long term
sustainability.
Chamoli Growth Pole (Uttarakhand)
District- Chamoli Area- 4783 sq. kms
Population- 1.03 lakhs
Project covers 3 blocks, Joshimath, Dasholi
and Karnaprayag out of the district’s 9
blocks. Livelihoods are largely dependent
on agriculture, 66 per cent workers being
engaged in agriculture and allied sectors.
About 1.8 % of the workers are engaged in
household industries. The remaining 32.4%
is engaged in other activities.
Present situation: Religious tourism is
primarily the driver of the local economy
with traffic in excess of 1.5 million visiting
the Badrinath and Hemkunt Sahib Route
within the project area. The approach has
been on two fronts:
o Expand tourism from a purely seasonal
and low per-capita spending activity to an
extended season and high value activity.
o Develop production base in the region to
garner a large share of tourism supply chain
through increased production & up-graded
service delivery & to achieve commercial
scale market supplies.
Chamoli growth pole would involve
intervention in tourism, agriculture,
horticulture, livestock, handicrafts, wool &
physical infrastructure.
Kollam Growth Pole (Kerala)
District- Kollam Area- 290.63 sq. kms
Population- 7.97 lakhs
The growth pole area consists of 7 village
panchayats and Kollam town. The main
activities of the growth pole area are:
fisheries, cashew and coir. Kollam is
synonymous with cashew processing and
60% of the country’s exports are from the
clusters within the growth pole area.
Present situation: Known for traditional
drum roasting process the sector has not
invested in up gradation in terms of
technology, work environment and good
practices. Major problem of fisheries sector
is its unorganised nature, poor and
unhygienic conditions of landing and
auction centers, poor sanitation, dumping
of wastes and lack of post-harvest infra.
The key interventions include processing,
value addition, packaging, etc., in cashew
sector, catching, auction, vending, pre-
processing and ancillary activities, etc., for
marine and inland fisheries, pith and shell-
based products for coir, backwaters,
cultural, religious, handicrafts-straw
picture, lace making, bamboo products,
lake management, beautification, soil and
water conservation, etc.
Champa Growth Pole (Chhattisgarh) Howrah Growth Pole (West Bengal) South-West Kamrup Growth Pole (Assam)
District- Howrah Population- 5.25 lakhs District- Kamrup Area- 920 sq. kms
District- Janjgir–Champa Area- 4468 sq.
Domjur and Panchla blocks have been Population- 5.28 lakhs
kms Population- 5.42 lakhs
proposed as Howrah Growth Pole area. Consists of six blocks of Chhaygaon,
Project area covers 4 blocks of the
Significant proportion of population is Rampur, Chayari, Bordnar, Boko, Bongaon
Champa district & historically has been
engaged in the unorganised sector. Panchla and Goroimar.
one of the major centres of craft-based
is known for sari and wig whereas Domjur Present situation: About 57% of the
industries generating significant
is known for gold jewellery & also for workers are engaged mainly in primary
employment. The district is known for
readymade garments, imitation jewellery activities and the rest in household
three ‘K’ industry clusters, viz., Kosa
and ornamental fish. Also engaged in processing units and tertiary activities such
(Tussar Silk), Kansa (brass & bronze) &
tertiary activities such as shop-keeping, as trade, merchandising, etc. Poverty
Kanchan (jewellery) related enterprises.
transport, petty business, sales & accounts for 42% of the total households in
Present situation: Both the old and the
distribution. 80% of the households are the project area. Besides agriculture, the
new industries face several problems and
below the poverty line . activities being pursued are sericulture,
barriers to healthy and sustainable
Present situation: The problems faced in forest products, medicinal plants,
growth. Tussar industry faces the
the manufacturing activities relate to high tourism and manufacturing.
problems in marketing, design, fabrics
degree of intermediation (without value The project interventions have been
processing, raw material supply cocoon),
addition), inability to connect to markets, proposed for agriculture, horticulture
skill, credit, etc. With regard to rice
inadequate skills, limited access to (banana, pineapple, betel nut and areca
milling, problems relate to plant capacity
institutional credit and lack of bargaining nut), sericulture and bamboo.
under-utilization, poor technology, lack
power across all professions as the workers
of sustained supply of paddy, etc.
are disaggregated and at the mercy of
Jewellery industry problems are related
credit and job providers.
to design, credit, tools and market.
The project interventions aim at removing
The areas with potentials of
these constraints through skill, linkages,
development are dairy, skill and
empowerment, credit availability, etc.
entrepreneurship development in the
Involves intervention in gold and imitation
existing and new activities like Electric al,
jewellery, zari work, readymade garments,
automobile, construction, etc.
ornamental fish and agriculture.