Volume 4, Issue 8 (August, 2015) Online ISSN-2277-1166

Published by: Abhinav Publication

Abhinav National Monthly Refereed Journal of Research in
Commerce & Management
PROFITABILITY ANALYSIS OF HANDLOOM WEAVERS: A
CASE STUDY OF CUTTACK DISTRICTOF ODISHA
Samira Patra1
M.Phil. Research Scholar, Department of Commerce, Ravenshaw
University, Cuttack, Odisha, India
Email: spandsp2010@gmail.com

Dr. Sanjeeb Kumar Dey2

Lecturer In Commerce, Department Of Commerce, Ravenshaw
University, Cuttack, Odisha, India
Email: kumarsanjeebdey@yahoo.co.in

ABSTRACT
In the present time scenario unemployment is a very vital problem in a developing country like in
India. In this aspect up to some extent the handloom products of the handloom industry solve this
above problem. Handloom industry is coming under the small scale industry. Handloom is a rural
based and labour intensive industry. So, to make rural people economically independents, rural
industrialisation is a vital necessity through handloom industry. There are various handloom products
are produced by the handloom weavers in Odisha. Some of the products have unique demand in the
local as well as in foreign market and they have earned considerable profits and others have very
negligible profits even if they have incurred losses. Reduced in prices, increases availability, improve
the quality /colour, durability, innovative design, more varieties, latest fashion and trends, more
awareness, special market survey for handloom products, customization, suitable whether condition
and reduce intermediaries etc. are needed to improve the satisfaction level of handloom customers.
Various scholars have been studied about the handloom industry which termed as textile industry. The
present paper has both descriptive and analytical in nature. The data have been collected through the
questionnaire as well from the internet. It also has group discussion with around 100 handloom
weavers of Cuttack district. The present study attempts to analyses the profitability of handloom
products in Odisha. Various statistical tools like mean, standard deviation and chi-square test have
been used to analysis the profitability of selected handloom products of Odisha.
Keywords: SSI; Handloom; Handloom Weavers; Products and Profitability

INTRODUCTION
Odisha handloom products have a significance demand in the local and foreign market. Odisha has one
of the richest traditions of handloom and handicrafts in the country, which goes back to the time of
ancient. The ancient rock-cut caves and beautiful stone carvings drawn in the temples of medieval
Odisha provide a flash of the rich tradition of crafts, art and sculpture in the ancient past. In a poor and
industrially backward state like Odisha, these traditional industries like handloom and other popular
handicrafts such as stone carving, wood carving, silver filigree, applique, pattapainting, coir,
dhokracasting, bell metal works, etc hold considerable promise for economic empowerment and
provide gainful employment to the technically little qualified, less educated and poor in the rural non-
farm sector. It is found that next to agriculture, handloom and handicrafts sector is the major provider
of employment to the people in Odisha. Apart from that, handloom and handicrafts products of Odisha

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are appreciated all over the country and outside because of exquisite designs, natural motifs and superb
colour combination.
It is found that not because of the popularity of tie and dye handloom fabrics all over the country and
the promotional incentives provided by the government during different plan periods, the handloom
industry of Odisha has passed through many ups and downs. This is because of wide difference in the
skill level of weavers in Odisha and their division into different weaving sub-castes according to their
weaving knowledge and skill. There are several sub-castes of weavers in Odisha such as Bhulia,
Kostha, Kuli, Dera, Saraka, Rangani, GaudiaPatara, AsaniPatara, Bengali Tanti, Asani Tanti, Gaudia
Tanti, Pana Tanti, Matia, Jhola etc. Besides this there are scheduled castes like Ganda and Pana and
scheduled tribes like Bonda and KutiaKandha, who also do weaving works. However, the tie and dye
handloom fabrics for which Odisha is famous all over the country is mainly woven by the Bhulia
weavers of Odisha in double ikat (warp & weft design) and the Gaudia Patara, Asani Patara, Kostha,
Saraka and Dera in single ikat (weft design). The other weaving sub-castes mainly weave plain
handloom clothes including checks and stripes designs. As a result, excluding the highly skilled tie and
dye weavers constituting around 40 per cent of the weaving population in the state the fate of rest 60
per cent of the weaving population in Odisha has always depend upon government.
The handloom industry suffers various problems. Firstly, the tie and dye technique is highly labour
intensive, which on the one hand makes for wide employment opportunities for the weaver, but on the
other makes for high costs of production and hence pricing of the product. This in turn reduces the
market competitiveness and market size of the Ikat handlooms in a price sensitive textile market like
Odisha. The second set of problems has arisen in attempting to solve the above problem set. In order to
retain the overall market size, the less skilled weavers of Sambalpur diversified into a variety of lower
value handloom products not involving the Ikat technique. This included common handloom products
like dhotis, towels, napkins, etc. However, such handloom products are rapidly being replaced in the
market by the lower cost power-loom fabrics on the one hand and by more competitive handloom
clusters in South India (Tamil Nadu) and North India (Uttar Pradesh). This in turn has led to the third
set of problems for the cluster. In order to ensure the survival of the sector, the Odisha State
government has established a heavily subsidised, state led and managed, cooperative sector in
handlooms. This solution, not being market determined, has distorted the entire economic structure of
the handloom sector and, with the removal of subsidies, resulted in the downfall of the handloom
sector in the state.
Handloom weavers of Odisha, produce a wide variety of fabrics such as sarees (which constitute the
major component), dress materials, scarf’s, dhotis, towels, other fabrics of day-to-day use as well as
the highly artistic calligraphy on fabrics (wall hangings), etc. It has been noted that there is a wide
difference in the skill level of weavers in Odisha and their fission into different weaving sub-castes
according to their weaving knowledge and skill. So far as designing and techniques are concerned, it
varies from double ikat (tie and dye) involving highly intricate designs woven by the BhuliaMeher
weavers of undivided Sambalpur, Bolangir, Kalahandi and Phulbani districts (such as Pasapalli,
Bichitrapuri, etc) to single ikat woven by Saraka Tanti in Maniabandha, Nuapatna area of Cuttack
district (Khandua designs) to extra warp and weft designs like Bomkai, silk of Berhampur, cotton of
Khurda district, vegetable dyed fabrics of Kotpad (Koraput district), fine count sarees of Jagatsinghpur
and Tassar fabrics of Gopalpur, Fakirpur in Kendujhar district. However, the tie and dye handloom
fabrics for which Odisha is famous all over the country is mainly woven by the Bhulia Meher weavers
of Odisha in double ikat (warp & weft design) and the GaudiaPatara, Asani Patara, Kostha, Saraka and
Dera in single ikat(weft design). The other weaving sub-castes mainly weave plain handloom clothes
including checks and stripes designs.
REVIEW OF LITERATURE
There are number of studies carried out by various researchers in this area. Some selected research
works are portrayed as follows:

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George Mathew (1987) in his Ph.D thesis “Price, Profitability and Employment in the Handloom
1

Industry in Kerala” studied the price, profitability and employment in the handloom industry to make
detailed analysis of uniqueness of this industry and other important aspects such as organisation,
functioning and problems. He concluded that the handloom industry can solve the unemployment
problem in India to a great extent. Under the normal conditions the weavers are able to get at least 5%
profit when they marketed their products. But it cannot compete with power-loom sector.
Khan A. Shabinullah (1991)2 in his Mphil Dissertation “Production management in handloom industry
– a study based on Primary weaver’s co-operative societies in Paramakudi Taluk” studied about the
various problems of the handloom products and he concluded that the overall set up is rather
disappointing, discouraging and distressing the weavers in general because some of the societies are
bogus or defunct and existing only on paper to gain certain personal advantages. Some of the societies
are economically non-viable on account of low capital base of members besides low turnover,
inadequate working capital and continuous losses.
Singh Rajmani (1992)3 in his Ph.D thesis “Management in Handloom industry- A study of the
production and marketing of handlooms for Exports” studied the production of handlooms in the
country and identify the problems affecting it’s production along with the industry’s ability to meet
prospective demand both local and foreign. He concludedthat the design of the products have not been
changing according to taste, choice and demand of the customer. The result being that demand for
Manipuri Handloom has not been picking up.
M. Soundarapandian(2002)4 in his occasional paper of NABARD, Mumbai “Growth & Prospects of
Handloom sector in India” studied origin, growth problems and hindrance of handloom industry in
India since pre-independence period and post-independence period. He was mentioned in his paper
that the cotton clothes were largely exported to other countries. The yarn was hand spun and the cloth
hand woven and the super skill of weaker has been handed over from generation to generation.
K. Mahendra Kumar(2010)7 in his Ph.D thesis “An analysis of production and marketing of handloom
Fabrics in Andhra Pradesh – A case study of Prakasam District” studied the progress, production,
problems, marketing and the technology of handloom industry. He concluded that Handloom industry
is facing many problems related to technology, raw materials, working capital, production, pre-loom
process, marketing, competition, fascinating factors and other problems that compel them to commit
suicides.
Nadh Rayapati Raveendra, Rao P. Venkat and et al. (2013)8 in their topic “Handloom market: need for
market Assessment, problems and marketing strategy” they have studied the market assessment,
problems, marketing strategy and marketing mix etc. They concluded that Reduce the prices , increase
availability , improve the quality / colour durability , innovative design, More varieties , latest fashion
and trends , more organized , more advertising , increase awareness , special market survey for
handloom products , customization, suitable to weather conditions and reduce intermediaries etc. are
needed to improve the satisfaction level of handloom customer. Promotion / advertisement ,
availability / increase number of outlet ,exhibitions ,develop new designs , awareness , price to be
reduced , proper marketing , more customization of products, link it with brand India , improve the
quality , customer friendly services , improve durability , provide machines to weavers , remove
middleman from chain and fashion orientation etc. are needed to make handloom more popular.
A. Ramesh (2015)10in his topic “Analysis of profitability and Financial Health of the Handloom
weavers co-operatives societies in Karur District” studied the profitability and financial health about
the handloom weaver’s society. He concluded that there is no significance in achieving gross profit of
the various societies.
Boruah Rickey Rani and Kaur Satvinder (2015)1 in their topic “A study on the analysis of economic of
weavers’ cooperative societies in Assam” analyzed the business operation of selected handloom
weaving units in Assam and concluded that this sector is beset with manifold problems such as

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obsolete technologies, unorganized production system, low productivity, inadequate working capital,
conventional product range, weak marketing link, overall stagnation of production and sales and,
above all, competition from power loom and mill sector.
OBJECTIVE OF THE STUDY
1. To study the profitability position of the selected handloom products of Odisha
2. To make comparative study of profits between the selected handloom products of Odisha.
3. To Provides suggestion for improving the profitability of handloom weavers in Odisha.
IMPORTANCE OF THE STUDY
Handloom products in the country had attained a very high degree of perfection and reputation in the
ancient Arabian and European countries. The importance of the handloom industry had been noted by
many foreign travelers and historians. The prosperity of the cotton textile in India founded the British
traders. They established a series of factories at Kutch, Ahmedabad, Surat, Calicut and Cochin and
many other places. The establishment of factories at the time of the decline of the Mughal power was
instrumental in maintaining the continuity of industrial life by giving employment to artisans. It is a
well known fact that the handloom weavers in some parts of the state are starving to death and even
commit suicides, due to lack of facilities as well as disproportionate earnings corresponding to their
labour, in the weaving activity. The standard of living of the weavers is significantly low and they are
leading miserable and pitiable life due to unemployment and underemployment. This situation prevails
everywhere in our country.
A handloom product of Odisha, which is chosen for detailed research study, is no exception to this
situation. This pathetic condition of handloom products in Odisha demands thorough investigation into
the problems and measures to plug the loopholes and find remedies to the problems confronting
handloom products. In one hand, the costs of the products are increasing due to increase in raw
material prices and labour charges etc.(because handloom industry is a labour intensive industry) and
in the other hand demand for the handloom products are decreasing due to computerized and machine
made products which have more design at lowest costs. Thus the Selling prices of the products are
decreasing due to decrease in demand for handloom products. It leads to decrease in amounts of profits
earned. So, it is necessary to analyze profitability positions of the Odisha handloom products.
HYPOTHESIS OF THE STUDY
On the basis of objectives of the study the following Null hypothesis may be formulated:
Ho: There is no significance difference between profits earned from various handloom products of
Odisha
H1: There is a significance difference between profits earned from various handloom products of
Odisha
RESEARCH METHODOLOGY
The study involves the collection of primary as well as secondary data. The primary data were
collected directly from handloom weaving units operating in Nischintakoili block of Cuttack. The
sample primary data are collected from around 100 handloom weavers. These handloom weavers
divided into around ten handloom units. The sample data has been collected during the month of May,
June, July 2015 relating to the year 2014-15. For this purpose an interview schedule/ questionnaires
was prepared for obtaining necessary information. The secondary data relating to handloom products
as well as handloom industry were collected from the published articles and also internet source has
been referred to. The collected data were tabulated and analyzed properly in accordance with the
objectives of the present study. The collected data has been analyzed and interpreted with the use of
some statistical tools such as mean, standard deviation and chi-square test to arrive at afore said

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objectives. An extensive survey of literature enabled the co-ordination and analysis of data and
information collected from various sources.
DATA ANALYSIS AND INTERPRETATION OF RESULT
The table no-1 shows the classifications of 100 handloom weavers (as it is taken as sample) according
the Gender, Literacy, Age Composition, Categories of weavers, Monthly income of weavers and no of
persons assigned (as per our assumption) to a unit. The total 100 handloom weavers are classified in to
10 handloom unit and the table shows the numbers handloom weavers per each handloom unit in the
study.
Table 1. Classification of Sample
Handloom weavers Percentage Handloom weavers Percentage/Persons
(N=100) (N=100)
1.Gender wise 5.Monthly Income of
Classification: Weavers:
Male(No of Male=58) 57.52% >1800 5.00%
Female (No of Female=42) 42.48% 1801-3000 22.50%
2. Literacy of Weavers 3000-5000 55.50
Illiterate 13.00% 5000+ 13.00%
Under Matriculation 69.00% 6. No. of Persons per Unit:
Above Matriculation 18.00% Unit No-1 12
3.Age Composition Unit No-2 08
Child 25.27% Unit No-3 10
Adult 19.32% Unit No-4 10
Young Persons 32.73% Unit No-5 15
Old Persons 22.68% Unit No-6 05
4.Categories of Weavers: Unit No-7 13
Master Weavers 45.50% Unit No-8 10
Independent weavers 32.25% Unit No-9 07
Hired Eavers 22.25% Unit No-10 10
Source: Field Survey
In the present study, the selected handloom products of Odisha are Pata Saree, Body Bandha Saree,
Kumbha Saree, Silk saree, Cotton (design) saree, Cotton (plain) saree, Buti Saree, Scarfs, Gamuchha,
and Handkerchief etc. The Costs price of various products, the selling prices of the products and the
profits earned by the handloom weavers are presented in table format. The above ten products has
following data relating to cost of production, revenue of these products as well as profits from each
products are given as follows:
Table 2. Cost price, Selling price and profits of selected handloom products
Cost Price (per Selling Price (per unit) Profit (per unit)
Name of Handloom Products unit)amount in Rs. amount in Rs. amount in Rs.
Pata Saree 2200 2500 300
Body Bandha Saree 1200 1400 200
Kumbha Saree 500 600 100
Silk Saree 470 500 30
Cotton(Design) Saree 400 500 100
Cotton(Plain) Saree 350 400 50
Scarfs 200 250 50
Total 830
Maean/Average profit per unit 83

Source: Field Survey

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Average Profit (Mean of Profit)=830/10=83
From the above table it is clear that the Pata saree has highest cost of Rs. 2200/- per unit, revenue is
Rs. 2500/- per unit and profits earned from above ten handloom products have an average profit of Rs.
83/- per product. Pata Saree has maximum profits of Rs 300/- per products and Scarf has minimum
cost of Rs. 200/ per unit, revenue is Rs. 250/ per unit and profit of Rs. 50/- products. The above
product has average profits of Rs. 83/ per Products. The Products silk saree has minimum profit of Rs.
30/- per product.
Table 3. Revenue of Ten Handloom Units/Products for the year 2014-2015 (Amount in Rs.)

Source: Field Survey

The table-3 shows that the product Body Bandha Saree has highest S.D i.e. Rs. 195279/- and product
Cotton (plane) saree has minimum S.D. i.e. Rs. 69697/- . The Product Body Bandha Saree has
maximum sales value in the year 2014-15. The Unit No 5 has maximum S.D. i.e. Rs. 260987/- and
unit no 6 has minimum S.D. i.e. 86996/- as regards to their sales revenues.
Table 4. Cost of Ten Handloom Units/Products for the year 2014-2015 (Amount in Rs.)

Source: Field Survey

The table-4 show that, the product Body Bandha Saree has highest S.D i.e. Rs. 167382/- and product
Cotton (design) saree has minimum S.D. i.e. Rs. 58119/- . The Product Body Bandha Saree has
maximum cost price in the year 2014-15. The Unit No 5 has maximum S.D. i.e. Rs. 5760000/- and
unit no 6 has minimum S.D. i.e. 74168/- as regards to their cost price.

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Table 5. Profits of Ten Handloom Units/Products for the year 2014-2015 (Amount in Rs.)

Source: Field Survey

The table-5 show that, the product Body Bandha Saree has highest S.D i.e. Rs. 27897/- and product
silk saree has minimum S.D. i.e. Rs. 6974/- . The Product Scarfs has maximum profits in the year
2014-15. The Unit No 7 has maximum S.D. i.e. Rs. 44983/- and unit no 6 has minimum S.D. i.e.
17301/- as regards to their profits.
Testing Of Hypothesis
The Chi-square test has been used to test the hypothesis formulated in this study.
Table 6. Annual profits of seven sample products (Amount in Rs.)

The table-6 shows that sample of seven handloom products have annual average profit of Rs. 6600/-
and Standard deviation of the seven handloom products is 3460.25 and co-efficient of variation is
52.43%.
Hypothesis
H1: There is a significance difference between annual profits of sample handloom products.

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Table 7. Computation of the calculated value of the Chi-square (5% degree of freedom) (Amt.in Rs.)

From the above table, it appears that the calculated value of the chi-square=10884.85 and that the
given observation being in the nature of an individual series, the degree of freedom is given by
V=n-1=7-1=6
Thus, with reference to the degree of freedom(d.f) at 5% level of significance, the critical value of chi-
square is obtained at χ20.05=12.592.
A comparison between the calculated value (10884.85) and the critical value (12.592) of the χ 2 reveals
that the calculated value of χ2 is much more than critical value. Hence, the difference between the
observed and expected values of profits is significant and thus the hypothesis that all the seven
handloom products have equal profits potential is rejected.
So, Accept H1and reject H0. Means there is a significant difference between profits earned by seven
sample handloom products of Odisha.
CONCLUSION
The Odisha handloom products have wide demand in the local as well as foreign markets. As per our
study to the profitability of Odisha handloom products have a significance difference in their earning
of profits. Though handloom sector provides employment opportunities to the poor and dominant
people but the master weavers and the independent weavers have to invest in those handloom products
which have more profitability to them.
According to our study Unit-1 has annual profits of Rs 5, 66,400/- and per month income or monthly
income is Rs. 47,200/-. This unit consist 12 no. of handloom weavers. So, profits per month per
handloom weaver is Rs. 3933/-. This unit has maximum per month and per handloom weaver profits.
As per the product basis scraf has maximum annual profits of Rs. 12, 00,000 /- and per month profit is
Rs. 1, 00,000/- of all the ten handloom units. So, here per weaver and per month profits is Rs. 10,000/-
of all units. So, the weaver should invest in the product scarf.
This handloom industry started to decline since the industrial revolution and subsequent technological
changes. In addition, the introduction of money economy, free plays of market forces and dominance
of finance capital sickness to this industry. When handlooms started consuming mill made yarn, the
net effect was the dependency of this traditional industry on the organised capitalist cotton mill
industry. The ruling classes which protect the interests of capitalists in cotton textile industry, controls
and restricts the development of handloom industry. Yet this industry survived only because of the
consumers’ preference to handloom products.
SUGGESTION
Promotion / advertisement , availability / increase number of outlet ,exhibitions ,develop new designs ,
awareness , price to be reduced , proper marketing , more customization of products, link it with brand
India , improve the quality , customer friendly services , improve durability , provide machines to

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weavers , remove middleman from chain and fashion orientation etc. are needed to make handloom
more popular.
Thus from the above discussion it is clear that handloom industry gives a large opportunities to the
rural people but at the same time each and every products does not give equal profits and equal
demand. So, the master weaver/independent weavers has to analysis the profit potentiality and demand
of the particular products and invest in the market potential and profitable products by which the
economic conditions of handloom weavers can be improved.
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