RELEVANCE : GS paper 3 / Economic / Social Development / GDP growth

INDIA’S ‘ONE DISTRICT, ONE PRODUCT’ PROGRAMME

What is One District One Product Scheme

The ‘One District, One Product’ (ODOP) was launched by the Ministry of Food Processing Industries, to help districts reach their full potential, foster economic and socio-cultural growth, and create employment opportunities, especially, in rural areas. It aims to do this by identifying, promoting and branding a product from one district. The One District One Product scheme aims to turn every district in India, into an export hub through promotion of the product in which the district specialises. The initiative plans to accomplish this by scaling manufacturing, supporting local businesses, finding potential foreign customers and so on, thus helping to achieve the ‘Atmanirbhar Bharat’ vision.

The one district one product launch date is January 24, 2018, by the Uttar Pradesh Government, and due to its success, was later adopted by the Central Government. This initiative is carried out with the ‘Districts as Exports Hub’ initiative by the Directorate General of Foreign Trade (DGFT), Department of Commerce. The Department for Promotion of Industry and Internal Trade is an important stakeholder. In the scheme, the ODOP product is identified by the state for a district. The criteria for ODOP identification are given below:

• Percentage of ODOP produce relative to total agricultural produce of the district
• Perishable nature
• ODOP presence in the district relative to other districts
• Recognisability of the district with the ODOP product
• Processing level for ODOP in that district, other districts and states
• Number of workers engaged in ODOP production and processing
• Marketing linkages
• ODOP processing infrastructure in the district

Benefits to Districts

• Capital Investment: Existing micro-enterprises would be supported through capital investment. Enterprises producing ODOP products are given preference. New units, on the other hand, would be supported for ODOP products only.

• Marketing and Branding: Marketing and branding infrastructure support is provided. If marketing and branding are being conducted at the state or regional level, other products would also be supported.

• Subsidy: Under the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme with the ODOP approach, a credit-linked capital subsidy comprising 35% of the eligible project cost, up to Rs. 10 lakh (US$ 13,379.7) may be provided. The beneficiary may need to contribute at least 10% of the amount and the balance as a bank loan.

• Credit-Linked Grant: A credit-linked grant of 35% would be provided to support groups such as self-help groups (SHGs), Producer Co-operatives, etc. in their operations such as sorting, grading, storage, packaging, processing and so on.

• Seed Capital: Seed capital is provided at Rs. 40,000 (US$ 535.2) per SHG member involved in food processing. The capital is to be utilised for working capital and buying small tools.

• Branding and Marketing: Branding and marketing support is provided through grants of up to 50% of total expenditure, for the state or regional level ODOP product, to SHGs, co-operatives, etc. Branding and marketing are crucial for the growth of Micro Small and Medium Enterprises (MSME).

• Training: Training is provided with a focus on entrepreneurship development, operations, marketing, accounting, FSSAI standards, GST registration, Udyog Aadhaar, Geographical Indication (GI) registration and so on. Furthermore, training specifically designed for ODOP products is provided such as on hygiene, storage, packaging and development of new products. Such training helps the entrepreneurs conduct business operations efficiently as well as improve the quality of products.

Popular Products Selected Under the Programme

The Press Information Bureau reported that in the initial phase, the One District One Product list included 106 products have been selected across 103 districts in 27 states. The list of one district one product is quite comprehensive in nature and includes a wide variety of products. A few of the popular products selected in the one district one product scheme list as well as some success stories are described below.

• Soft Toys – Jhansi: The Indian toy industry is well known around the world and soft toys comprise a major part of that market. Soft toys in the Jhansi district in Uttar Pradesh (UP) were selected as an ODOP product. As per the ODOP Coffee Table Book, published by the state of UP, more than 50 soft toy manufacturers operate in Jhansi boosting job creation. These soft toys are supplied to major commercial centres and exported. Sons Warsi Toys, a soft toy manufacturer in Jhansi, used to manufacture three to six toys daily. After receiving financial support under the ODOP initiative, the firm scaled its manufacturing, and now employs 18-20 people. Sons Warsi can manufacture 50-80 toys daily and its monthly sales rose to around Rs. 1.5 lakh (US$ 2,007).
• Handicrafts – Gorakhpur: Gorakhpur, UP is especially famous for handicraft, banana fibre and terracotta products. Banana stem and other tree parts are used to extract fibre which can be used for making threads, carry bags, organic compost, etc. The district hosts several MSMEs engaged in preparing decorative handicraft products. Deoria Designer Private Limited, founded by Ms. Pooja Shahi, is an ODOP success story. She created decorative items such as handmade jewellery with four to six people. Today, her enterprise has grown to more than 100 women from SHGs. Furthermore, after reaping the benefits of the scheme, her company has scaled production to 250 pieces per day from 80 pieces.

• Brands Launched under ODOP: Pashupati Kumar Paras, Union Food Processing Minister, launched six brands under ODOP approach:

Outlook

The ODOP initiative has significant potential given its aim to achieve a district’s true potential by utilising economies of scale, product specialisation through identification and promotion through marketing, MSME growth and creation of employment opportunities. Furthermore, ODOP is raising awareness of the importance of GI. The training provided to entrepreneurs are helping them conduct operations efficiently, resulting in several success stories, especially among MSMEs. The broader trend can be seen through the growing share of Gross Value Added (GVA) by MSMEs to Indian GDP. The ODOP initiative is trying to raise awareness of ODOP products as well as their benefits of buying them, in domestic and international markets. Thus, the scheme offers an opportunity to strengthen local products having health, environmental or other benefits. This will help enable India to become a stronger economy and fulfil the Prime Minister’s Atmanirbhar Bharat vision.