FINAL REPORT OF

MINOR RESEARCH PROJECT

Financial Assistance Ref.No.MRP(H)-666/09-10/KAKA 005/UGC-SWRO Dated 08

January 2010 (XI plan)

“E CO N O M ICS O F E XH A U STIB L E R E SO U R CE S-
S - A CA SE STU D Y O F
Q U A R R YIN G IN D U STR Y IN G U L B A R G A D ISTR ICT”

Principal Investigator
Dr. J.V. Chavan M.A., Ph.D., SET
Assistant Professor
Basaveshwar Commerce College, BAGALKOT

FINAL REPORT OF A MINOR RESEARCH PROJECT SUBMITTED

TO UNIVERSITY GRANTS COMMISSION.
SOUTH WESTERN REGIONAL OFFICE,
BANGALORE
2012
 CONTENTS

Acknowledgements

List of Tables

List of Diagrams, Figures and Maps

Chapter No. Titles Page No.

Chapter-I : Introduction 1-20

Chapter-II : Natural Resources and Economic

Development 21-56

Chapter-III : Theories of Exhaustible

Resources: A Review

Chapter-IV : Profile of the study area

Chapter-V : Working of Quarry Industry in

Gulbarga District: An Economic Analysis

of Quarry Owners

Chapter-VI : Position of Quarry workers in Gulbarga

District: An Economic Analysis

Chapter VII : Conclusions and Suggestion

Bibliography

Schedules
Photos
 CHAPTER I

INTRODUCTION

1.1 Introduction :

Economic development has been concerned with the exploitation of resources within

the country for the welfare of the people. In the past or even today, capital plays an

important part in the exploitation and harnessing of the resources. The classical

emphasized the role of capital and capital accumulation in the process of development.

Over the centuries, when the evils of capitalism were brought to light by Marxists,

labourers took the pride of place. Various measures to protect labourers from exploitation

were introduced by the governments in the beginning of 20th century. Influenced by the

writings of webs the concept of welfare state was evolved, which is supposed to take care

of individuals from ‘womb to tomb’. It cares for individual both as a producer and as a

consumer. It provided good conditions of work, reasonable wages, facilities for training

and development of skill, adequate compensation for accidents during the working

period, housing facilities, provident fund facilities etc., to individual. Till the 50’s of last

century, little attention was paid to the utilization of Land (Natural Resources) a primary
factor of production without which nothing can be produced. The very term

“exploitation” suggested reckless use of natural resources. This is because most of the

countries were influenced by the G.N.P. (Gross National Product) approach. The goal

was maximum production of goods and services for the benefit of the members of the

community. It led to a ‘mad-race’ among the nations to achieve higher and higher rates of

G.N.P. (Gross National Product) for which natural resources were exploited. No attention

was paid to know as to how the output was consumed and how it was consumed and how
much of the output was wasted and how much it affected the growth of the economy and

the welfare of the people ? etc, The recognition of any country had depended on the rate

of growth of output and consequent rise in the level of “Standard of living”. This was

described by Samuelson1 as consumption approach or cow-boy approach, where as a

cow-boy is not worried about future. He is interested only feeding his livestock. The

defects of his approach were discovered very soon. The chief defects amongst them are;

1. Growing of industrialisation leading to overcrowding of cities and creating

housing and sanitation problems. It caused slums areas with excessive congestion

in cities.

2. It lead to pollution of all kind of air, water, land and noise, about which attention

was been paid only recently. All these became, in the words of E.J. Mishan,2 cost
of economic growth. It is aptly described that the solution became the problem.

Economic development which was supposed to provide solution to the problems

of welfare became a problem itself, creating issues of ill-fare. A more serious

threat to mankind is the rate at which natural resources are utilized, causing their

rapid depletion especially those resources which are fixed in quantity and are

likely to be exhausted within a short span of time. For example the U.S.A. at
present uses so much energy, every day, which would be sufficient for six months

under developed countries. If continued at this rate, the world as whole would face

the problem of exhaustion of important mineral resources very soon. During 50’s

and 60’s it was this fear which caught the attention of the world body. In 1969, in

the General Assembly of U.N.O., the then secretary General Mr. U. Thant3

appealed to the member nations for conserve the resources. To quote him in his

own words: “ I do not wish to seem over dramatic but, I can only conclude, from
 the information that is available to me as Secretary General, that the members of

United Nations have perhaps ten years left in which to subordinate their ancient

quarrels and launch a global partnership to curb the arms race, to improve the

human environment to diffuse the population explosion and to supply the required

momentum to development efforts. If such global partnership is not forged within

the next decade, then I very much fear that the problems I have mentioned will

have reached such staggering proportions that they will be beyond our capacity to

control.”

The arms race environmental deterioration (pollution), the population explosion and

economic stagnation would be long term problems of modern world though the common

man is neither aware nor interested in these issues. The leaders, the thinkers, and the

scientists (Physical & Social) must address themselves to this connection and published

its findings in the publication “The Limits of Growth.”4

The group led by MIT (Massachusetts Institute of Technology) Scientists. i.e.

Meadows and others employed the latest technology to develop a model known as

“World dynamics”, the basis of which is the recognition that the structure of any system,

the money circular interlocking, dooms times delayed relationship among its components
is often as important as the individual components themselves. It considered five

important variables of the “world dynamics”, viz i) Population, ii) Food, iii)

Industrialisation, iv) Depletion of resources and v Pollution.

All these interact with each other and grow at an exponential rate, finally causing

and collapse of the economy. Population for example is now increasing at a faster rate.

Thanks to substantial fall in the death rate, on account of improved health facilities and

effective control of major diseases like plague, malaria, but the birth rate has nor
similarly comedown, hence does the explosive trend in population. The world will have

more than 100 billions which create problems of food, clothing and shelter and also

production of basic facilities like health and education especially in the Third World

countries.

Secondly, food supply cannot cope up with such explosive increase in population.

All best lands are already brought under cultivation; hence increases in food output can

come about following “Recardin Principle” by bringing in inferior land under cultivation.

In both cases, it leads to rising cost and food becomes dearer and dearer.

Thirdly, industrialization is taking place in all the developing counties also.

Though this is a welcome feature from the point of view of income and employment but

this is taking place only in the rich countries and will further aggravate the differences

between rich and poor countries.

Fourthly, higher rate of industrialization has led to rapid depletion of vital

resource like coal, energy, minerals etc. The present life style is described as energy-

intensive. Sooner or later important resources which are fixed in quantity or stock would

dry-up.

Lastly, growing population and industrialization have resulted in pollution of all

kinds including air, water, land and noise. Big cities have become dens of pollution.

All these are not only growing but also they interact with each other causing

acceleration in the growth rate of others. Thus economic development, which is aimed at
increasing welfare of the people, is actually reducing the welfare due to side effects of

development. The Massachusetts Institute of Technology (MIT) projecting on the basis of

“System dynamic” prophesied that the World economy would collapse within 150 years,

if remedial measures are immediately taken. It suggest like wise that-

1. The population should take advantage of the possibility of birth control.

2. The desired number of children should be two per family.

3. The average level of industrial production should remain constant at the 1975

level

4. The consumption of natural raw materials should be reduces from 1975 onwards

to 20% of the 1970 level.

5. The industrial and agricultural emission of toxic substances should be reduced to

25% of the 1970 figure.

6. Capital for food production should be made available for the elimination of

malnutrition in such a way that it should be independent of profitability criterion.

7. More capacities should be directed to agriculture and in this context land

improvements should tale priority.

8. The quality of industrial goods should be improved with purpose of extending the

scope of their application.

According to Limits To Growth (L.T.G.) study present trends would severely

affect sustainable development. It is dreading even to think of emerging situation of

complete exhaustion of resources. L.T.G. study is described as the second “Malthus”

frightening the people, about the future of mankind.

Though M.I.T. forecast that world economy world collapse within next 150 years,

and evoked lot of research, but later researchers criticized this approach and its
conclusion, severely and dispelled the fear among people. More discoveries, More

inventions, improvement in technology, varied substitute materials, efficiency in use of

resources economy in their use, are the remedial measures suggested , which will post-

pone indefinitely the dreaded collapse. According to them. As long as there is no dearth

of human ingenuity, there is no such fear of the collapse. The world has been using the

resources right from the day “Adam and Eve” appeared on the scene. So many

civilizations arose and fell. The world has continued, it has not collapsed. Nevertheless,

optimum use of resources is a must. Indiscriminate use of resources may endanger the
availability of even renewable resources in future, for example Water. Hence

conservation of resources and careful use of resources have assumed great significance

now a days.

1.2 Significance of the Study:

Interest in sustainable development and conservation of resources is of recent

development which is urgently needed every where. Earlier development theories

emphasized the exploitation for the welfare of the people rather than conservation. It

followed consumption approach. During the seventy’s of the last century, the MIT

scientists threatened the world of “dooms day” within next 150 years, if suitable steps are

not taken to alter the present high life style requiring high rate of exploitation of

resources causing complete exhaustion in the very, nor distant future. Later researchers

dispelled the Malthusian fear of dooms day. Nevertheless, the researchers emphasized the

need for conservation and sustainable development can not be imagined in the absence of
natural resources. The quality and quantity of natural resources coupled with technology,

ultimately determine the state and extent of development in any country.

Natural resources are broadly divided into two categories, viz, a) The renewable

resources, which do not pose a serious problem, and b) The exhaustible resources, which

are non-renewable resources. These resources are especially exhaustible once. Have to be

optimal used keeping in mind the inter-temporal equity and availability.

The unequal distribution of World resources among the countries of the world,

compels each country to take suitable measures for optimum utilization of resources
available within the country. Incidentally, it may be noted, even renewable resources also

pose a problem if the rate of exploitation of such resources exceeds the rate of

replenishment.

In respect of exhaustible resources an interesting exercise was made by R.M.

Slow5. In his article, he tried to answer the question ‘can an economic system which uses

its exhaustible resources, maintain its standard of living forever’?. He considered highly
simplified analysis taking the following production function of Cobb-Douglas’s type.

Y=ect Lg. Dh. K1-g-h

Where e = has a value little over 1.0,

Ct = rate of technology change and time respectively.

Y = output, L = Population, D = Natural resources, K = Capital

The explanation of the above formula run as follows:

A) Assume ther no technological change then c = 0, and ect becomes constant. If K/L

reation is constant. D/L approaches Zero as resources are used up. Y/L must also
 approach Zero. The per capita standard of living will eventually fall to zero. But if

K/L ration grows without limit and D/L reduced to zero. Y/L can remain positive.

Capital accumulation can compensate for resource exhaustion.

B) If L increases in a Malthusian fashion, there must be an upper limit to K/L/ So

with exponential growth, Y/L reaches eventually zero. So hold population

constant, allow K/L to increase without limit. So that Y/L remain positive. The

highest standard of living that can be provided depends on initial stock of capital

per worker.

C) If c>0 (technological programme increasing) so that ect + increase with time for

any value of ‘c’ we can calculate the rate of growth of population. That will keep

standard of living constant and positive. Here technological programme

compensates the growth in population.

The Strong assumption for these results are:

i) Cobb-Douglass production Function (P.F.) assumes constant returns to scale.

ii) It assumes Cobb Douglas Elasticity substitute (C.E.S.) among inputs

iii) With CES between “D” and “K” there is nothing special about “D”. This

means “K” acts as a perfect substitute for “D” .

iv) So Solow suggested if use of exhaustible resources is directed toward

production of renewable substitute goods and investment in human capital

and if population is controlled, it is possible to maintain the standard of living

forever. Progress in science and technology is likely to aid exploration and

exploitation, new resources may be found out, new methods of efficient

 exploitation may be employed, New uses, new substitutes may be suggested

thus there is no fear of “Dooms Day”

However, unrestricted optimism about future availability of resources is not

justified. On the other hand, Overall pessimism is equally one sided and unwarranted. A

realistic assessment is necessarily more complex and will involve dealing in specific

individual resources. Poor countries faced with pressure of population can not afford to

become optimistic about their resources. They must use their resources optimally so that

development becomes sustainable. This is specially so with exhaustible resources. Much

care has to taken in the use of exhaustible resources to preserve inter generational equity

as exhaustible resources are fixed in stock. If we want to have more now, less will be

available for future. On the other hand if we preserve more for future, we will be

unnecessarily put to hardship at present. A proper balance has to be struck between the

present and future in use of natural resource, particularly this is true in the case of

exhaustible one. Hence, the present study has assumed great significance in this project.

1.3 Statement of the problem:

Against this background, quarrying industry is taken for the study. Quarrying is

essentially dealing with exhaustible resources. It consists of extraction of stones from

underground and shaping the stones of different sizes, comes from building activities.

Due to poor and inadequate housing facility, there is ever growing demand for building

and houses. This would generate unlimited demand for building materials. In recent

years, there is a housing boom also. Finance is made available for building houses by the

Government, LIC, Banks and other Non-Banking Financial Institutions. The rate of

interest on housing loan is also reduced recently. Therefore, we have a situation where

ever growing demand chases fixed stock of a resource. This is likely to lead to
misallocation of the resources, and depletion of the resources too rapidly. There is a need

for optimum use of resources over the years to maintain equity in the use of resources

over time is warranted. Hence the present study.

1.4. Review of Literature:

Undoubtedly, there has been a good account of theoretical literature on exhaustible

natural resources. But empirical work on stone quarrying is not in existence much. Still

there is a gap which has to be filled up. There is a need for such a research which

proposed us to undertake the study of exhaustible natural resources, specially on stone

quarrying.

Contemplation of disappearing of the worlds supplies of minerals, forests and their

exhaustible resources led to demand for regulation of their exploitation. Presently, these

products are being selfishly exploited not only at too rapid rate but also at cheaper cost

leading to wasteful consumption. Therefore, for the benefit of future generations, a

suitable measures to conserve such natural resources must necessarily be adopted.

Most studies on non-renewable resources production and pricing assumes that

there is affixed reserve base to be exploited overtime. But in fact, with economic

incentives reserves can be increased. Here we treat the reserve base to be exploited
overtime. But in fact, with economic incentives, reserves can be increased. Here we treat

the reserve base, as a basis for production and exploratory activity, as the means of

increasing or maintaining reserves. Potential reserves are unlimited, but as depletion

ensures given the amount of exploratory activity result in even smaller discoveries. Given

these constraints, resource producer must simultaneously determine their optimal rate of

exploratory activity and production.7

 The study relates to the demand for building materials environmental problems

like rocks-slips, rockslides deforestation, sound and air pollution which are being

experienced in areas of quarrying which can be checked by using remedial measures.8

Against this background regarding the exhaustible resources, quarrying activity in

Gulbarga district is studied with the following objectives.

1.4 Objectives

The following are the specific objectives of the present study:

1. To study the nature of quarrying activity.

2. To assess the kind of relations that exists among the owners and workers in quarrying

activity.

3. To examine the type and kind of quarry output

4. To study the extent of employment of labour found in quarrying activity.

5. To estimate the level of income of the people engaged in quarrying activity.

6. To study the extent of awareness among quarry workers about the exhaustibility of

resources.

7. To study the impact of quarrying activity on environment.

8. To recognize the realities of the situation and identify the real reasons of the problem.

9. To propose suitable remedial measures for solving the problems.

1.5 Hypothesis:

With a view to examine the above objectives the following hypothesis are tested in
the present study:
 1. People (owners) engaged in quarrying activity are not aware of the ultimate impact

of exhaustibility of resources on living standard of the people.

2. People engaged in quarrying activity are nor aware of the environmental impact of

their activity.

3. The workers employed in quarrying activity do not earn sufficient income to lead

a decent standard of living.

4. The workers working in quarrying activity are exploited by the owners.

1.6 Research Design and Methodology:

A) As the subject is concerned with the exhaustibility of the resources and the economic

well being of the people engaged in the exploitation of the resources, the study

has relied upon primary investigation in the area where quarrying activity is

carried on in Gulbarga district. Random samples are collected from all the talukas

of Gulbarga district where quarrying activity is found and used for drawing

inference in the study.

B) Sources of the Data:

The study has used both Primary and Secondary data.

i) Primary Data: The primary data about production, income, cost, expenditure,

investment, number of labourers employed, marketing, prices, profits etc are obtained

through prepared interview schedules from the concerned quarry owners (50) and

workers (50).

ii) Secondary Data: Data relating to total area, total population, total quarrying stone

area are obtained from Department of mines and Geology, Government of Karnataka,
 Bangalore, and other various published journals and periodicals and also information

from various offices within district and outside the district.

c) Tool and Analysis used:

The data/information are tabulated and analysed through simple statistical tools.

Arithmetic mean and percentage methods are employed in analyzing the

data/information. In addition, tabular and graphic methods are also employed. Further,

diagnostic approach is used wherever necessary.

d) Period of the Study:

The Data are collected for a period of five years i.e. from 2005 to 2010.

e) Area and Scope of the study:

The present study is concerned with quarrying activity found only in seven talukas

out of ten of Gulburga district. Data are collected through a well structured Schedule for

one hundred respondents spread over thirty nine villages of seven talukas of Gulbarga

district. In each village respondents are chosen by random sampling method. Since

quarrying activity has an agrarian type of relation in some talukas, of the two hundred

respondents, one hundred belongs to owners of quarries and remaining are workers. The

distribution of respondents of thirty nine villages in seven talukas is not uniform since

number of respondents have been decided on the basis of the extent of concentration of

quarrying activity in the taluka and selected in such a way that, where quarrying activity

is highly concentrated samples are more and where it is not so, respondents are less.
Through Schedules information’s are collected about the nature of the activity,

employment, income etc.

1.8 Relevance of the Study:

 The present study though concerned with exhaustible resources is essentially a

study dealing with socio-economic conditions of the people enganged in exploiting

exhaustible resources. The people employed in this industry are mostly belonged to

scheduled caste and scheduled tribe. This is an useful study for the government which is

striving its best to ameliorate, the economic and social conditions of the backward

communities. It has policy antipoverty programme with substantial income and

employment opportunities.

1.9 Chapter Scheme and brief out line of the study:

The present study is organized into 7 chapters as mentioned below:

CHAPTER-I : Introduction:

Introduction - significance of the study. Statement of the research problem, Review of

Literature- Objectives of the study- Hypothesis-Research Design and Methodology-

Relevance of the Study- Chapter Scheme and Brief outline of the study are explained in

the introductory chapter

CHAPTER- II : Natural Resource and economic Development

The Second chapter has discussed the nature of resources, their classification as

exhaustible and inexhaustible resources. It also discussed the approaches for the use of

resources, exhaustible resources in particular and its role in economic development in

general.

CHAPTER-III : Theories of Exhaustible Resources: A critical Review

The third chapter explained the theoretical background of the study of exhaustible

resources. It discussed the leading theories if exhaustible resources, especially the Gray

and the Hotelling models.

CHAPTER-IV : Profile of the Study Area

In the fourth chapter, the study is concerned with the profile of the district. It gives the

brief history of the district and examines the latest position with regard to the important

economic indicators like population, density, distribution of population, sex ratio,

educational status etc.

CHAPTER-V : Working of Quarry Industries in Gulbarga District: An Economic

Analysis of Quarry Owners.

In the fifth chapter, discussion about quarrying activity as distinguished from

mining activity and general description of the nature of relations in quarrying activity and

the socio-economic features of respondents selected for study is undertaken.

CHAPTER-VI : Position of Quarry Workers in Gulbarga District : An Economic

Analysis.

The sixth chapter analysed the data collected and discussed. The kinds of quarry output,

income earned by the owners of the quarries. It also highlighted the expenditure pattern

in the quarrying activity, with its emphasis on the workers. It also deals with the

problems of exhaustibility of resources and environmental impact of the quarrying

activity.

CHAPTER-VI : Conclusion and suggestions

The seventh chapter summerises the main findings of the study and offers some

recommendatory suggestions for policy perspective.

1.10 Summing Up:

 Though there is adequate literature on m mining but quarrying which is different

from mining, (of-course it is sub-set of mining) lacks adequate attention of the public as

well as the Government. As there is no adequate literature available on the economics of

the quarrying, economic relations that exist in quarrying activity, extent of employement,

Socio-economic condition of the workers etc., there is a need of separate study in this

respect. This work contributes to the understanding of Socio-economic relations in

quarrying activity. A modest attempt has been made here to throw light on the issues

connected with quarrying activity for solving the existing problem.

 CHAPTER-II

NATURAL RESOURCES AND ECONOMIC DEVELOPMENT

Natural Resources: A Conceptual Clarification

The term “Resource” is used in many since by economists. A resource may be

natural or ‘man-made’; though man-made resources come out of natural resources by

the application of technology. Production and hence economic growth requires the use

of production factors namely Labour, Capital, Natural Resources.

By natural resources, we mean some thing useful and valuable in the condition, we
find it in the nature. To clarify further things, which are unknown and which have no

uses are not resources. Similarly, Things though useful if available in plenty are not

resources. Again, things produced with human guidance and capitals are not

resources. For example –copper ore is a resource, while copper wire is not.

A ‘resource’ is something that is useful and valuable in the condition in which we

find it. In its raw and unmodified state, it may be an input entering into the process

directly producing something of value, or it may enter consumption process directly

and thus acquire value. Hence, it is easier to define what is not a resource, than what

is a resource. Things that could be put to use with the available technology cannot be

considered as a resource, as they do not command any value. Things, though useful

will not have value if they are available in huge quantities relative to demand and as

such they cannot be considered as resource.

The term ‘resource’ is a dynamic concept. There is possibilities of a non-resource

having no value becoming a ‘resource’ and that too very ‘valuable resource’ due to

changes in information and technology. Generally things that are produced under
human guidance in processes, capital, technology and labour are not caller ‘resources’

although resources are always among the ‘inputs’ used to produce them. We call them

as capital. For example, copper ore is a resource, while copper wire is not. The

differentiation is rather thin. ‘Land’ is a natural resource, whereas ‘Capital’ is man-

made resource. ‘Scarcity’ is the inherent quality of a resource. What is not ‘scarce’ is

not a resource.

The scarcity of anything denotes that the amount available is limited relative to the

amount demanded. Any resource with a positive price must be scare. If its availability
were unlimited relative to demand, it would be free. This argument does not work in

the opposite direction. Some scare resources are unpriced because there is no

functioning markets in which to trade them.

Resources have multi dimensions. They have quantity, quality, time and space

dimensions. Air, for instance is a good example. It is available in most places in large

quantities relative to demand and it may seem more like a free commodity than a

resource. However, in many place, the quality of air is very much poor and the society

may be willing to spend more money to obtain good quality or higher quality air. In

enclosed and congested places, the air is very scarce and it is highly valued.

In brief, we can define natural resources as factors and materials available in

nature, which owe their origin and existence to the natural phenomenon that occur

automatically in nature. Those resources are used in production and consumption.

Natural resources are considered to be the gifts of God to mankind or it may be called

gifts of ‘Nature’ originating from biological, chemical and geological processes any

one of the following two features: (i) The stock is fixed, i.e. what is available or

maximum quantity is fixed by nature (ii) The stock may change at affixed ‘natural’,
 ‘biological’ rate. This rate may vary over a period, but the biological or chemical

factors will prescribe a maximum rate of change. For example, land, minerals ores

etc., come under the first category where the stock is fixed; forest, fish stock, flora

and fauna etc., come under second category where the stock may change.

Natural Resources in Economic theories:

Natural resources are in some form or the other essential for production. They

cannot be entirely replaced by non-material inputs. Their importance springs to the eyes

most immediately in the primary sectors of production, agriculture and mining.

Manufacturing and construction could not exist without inputs from the primary sectors.

The same is true for tertiary (“or high ranking”) activities even though the natural

resources input share may be relatively low in many cases. As the consumption and

production level of per capita income change the natural resources component in total

production will change as well and will usually tend to decrease relative to total output.

The relative weight of natural resources as a production factor is also influenced by

technological change. Technological progress may reduce the input of natural resources

per unit of output. Although savings in one direction, for eg. Land in agriculture, raw

materials in manufacturing industry; often imply additional requirements of another

natural resource, for eg: using more energy.

Changes in the production structure, technical progress and substitution between

the various natural resources themselves may and do modify our dependence on natural

resources for production and economic growth. Consequently, it is a flexible dependence

but dependence it is. Recent publications “most conspicuously, ‘ the limits to growth and

associates.” And recent events “(in particular the actions of the Organization of Petrol

Export Countries (OPEC))” have increased our awareness of the vital importance of
natural resources to world economy and society. Now and in future, what then are the

prospects of economic growth from the point of view of the future availability of natural

resources? Classical Economic theory had little doubt as to long term prospects of

economic growth. Scarcity of natural resources would lead in its view, ultimately

(according to Malthus or Ricardo) to diminishing returns to productive efforts.

Consequently, any process of economic growth would sooner or later slow down and

grind to a halt. In fact this view on scarcity became a doctrine as Barnett and Morse

(1965-p- 1)2 have printed out that the “doctrine that any inherently limited availability of
natural resources sets on upper bound to economic growth and welfare” gained for

economics its reputation as the dismal science.

J.S. Mill3 elaborated on the Ricardian approach and added an important

qualification. Technology and institutions may change as a consequence of progress of

civilization. The law of diminishing returns certainly holds, also in Mills’s view but this

law may however be suspended or temporarily controlled by whatever adds to the general

power of mankind over the nature and especially by any extension of their knowledge

and their consequent command of the properties and powers of natural agents Mills plea

not to push man’s interference with natural living space too far in order to preserve the

beauty of nature, has received less attention than his statement on the role to be played by

technical progress in reducing scarcity.

Although the law of diminishing returns has kept its place in the economic theory

ever since Ricardo, the doctrine of increasing natural resources scarcity faded away. The

progress of science and technology since the middle of the 19th century, the opening up

of new continents, the revolutions in the field of communications and transportation the

economies of scale to be realized in large production units are among the factors that
made the notion of scarcity of natural resources seem to be distance one. In economic

theory, hardly any interest was shown in the (aggregate) relation between natural

resources and economic growth. At most, some attention was paid to be discrepancy

between private and social criteria for exploiting natural resources.

By and large modern economist came to hold an optimistic view of natural

resources availability. They assumed often implicitly that technical progress and

increased substitution possibilities would in fact solve the problem except perhaps for the

scarcity of agricultural land in density populated countries or regions. Of course

development of additional and new resources would involve costs-but costs of a

magnitude that could be born without much pain. Most economists were inclined to agree

with E.Zimmerman4; “the well-known expert on the worlds resources, when he wrote in

1951,”Resources are highly dynamic functional concepts; they are not they become the

evolve out of the triune interaction of nature, man and culture….. the problem of resource

adequacy for the ages to come will involve human wisdom more than limits set by

nature.”

This optimistic view still prevails to date but it is meeting with growing

opposition. The concept of natural resources in indeed a dynamic one, but that does not

change the fact that it pertains to a limited physical space. Important resources may in

deed come close to exhaustion in the not too distant future. For eg. Oil. Concern for

environmental quality may impose constraints on the use of developing and using

resources may much higher than had been anticipated earlier. On the potential magnitude

of accessible mineral resources geologists and mining engineers often take a less

optimistic stand than most economists. The uneven distribution of resources over the
earth, the great disparities in resource consumption levels between countries and political
factors influencing exploration and trade complicate the picture even more. It seems

likely that general optimism of the last hundred years or so concerning the availability of

natural resources will be undermined further in the years ahead.

As suggested earlier, uncontrolled optimism regarding the availability of natural

resources is not justified, at the same time one need not be too pessimistic also, a realistic

assessment of resources depend upon number of factors. The chief among them are the

following:

1. Physical and biological aspects: The data regarding physically available resources is
not adequate. We require date about the composition of atmosphere lithosphere and

hydrosphere. These are not estimated so far. Similarly the potential availability of

living matter which is a resource, reproducing itself under appropriate condition is

also available, both these physical and biological aspects are very important in

stimulating the natural resources.

2. Technological aspects: Assuming that we have exact knowledge of resources, to

what extent we can harness them depends upon technology and its application,

without technology resources cannot be exploited. For eg. In India New Technology

in agriculture (Green Revolution) has contributed significantly in increasing

agricultural output. Metallurgical technology has changed the role of Aluminum and

has now become a leading metal next to Iron. However, there are some limitations,

viz a) Technology in always at a cost. Unless the demand for resources increase

considerably, efforts will not be made to find out new technology and make it

commercially viable, (b) In many cases technological advancement is dependent on

many countries, but it is doubtful how far different countries extending their helping

hand, (c) Technological development is attendant with negative effect. It may also
 be so important as nullify the advantage of technological development itself. For eg:

Kaiga, Cogentrics, Schemes etc. In a number of cases benefits of technical progress

may require a fundamental change in structure of the society and the individual

behavior.

3. Economic aspects: Economic aspects include the following : (a) In the market for

natural resources demand and supply factors operate in a different manner. On the

demand side primary commodity market exhibit an income elasticity of demand

lower than 1(<1). (b) It is not possible to make a general statement about the price
elasticity of demand for natural resources because there are differences, both

between product and between different uses of the same product. One product may

be substitute for other product. Instead of coal, water may be used for energy

production, depending upon the prices of both. Similarly, domestic use may be

substituted for industrial use of the some resources depending upon the price. (c) On

the supply side, the market for natural resources is rigid in the short-run because

supply is governed by natural and biological forces. Price fluctuations and stock

variations are common on the supply side.

4. Political Aspects: Mineral resources have vital role for economic and military power.

Countries which are rich in resources try to use their control over some resources to

increase their potential power. The present day world, exhibits sharp differences in

the resources. This is likely to lead to political interference in other countries using

such resources. For eg: Petroleum and Arab countries.

5. Cultural and ethical aspects: Conern for a healthy biosphere and awareness of the

finiteness of the Earth are among the factors that may induce a different attitude

towards material growth and the use of natural resources for that purpose.
 Ecological considerations are already gaining importance in production and

consumption decisions, although they still carry relatively little weight. A minority

of people, particularly in the rich countries, feel that the very uncertainty and lack of

knowledge about the complex and dynamic equilibrium in nature should make man

much more careful in his relations and interference with biosphere of which he

himself forms part. The fact that natural resources in dead matter form(minerals) are

in the last instance exhaustible adds to their inclination towards a materially simpler

life style.

The ethical consideration that the generations to come are also entitled to a world

in which human life is worth living strengthens their arguments. If this minority view

should gradually gain wider acceptance, future demand for natural resources would

obviously slow down considerably.

The above aspects of the issue of future adequacy of natural resources have been

touched upon merely to illustrate the complexity of the problems and the near

impossibility of a clear cut answer. Of course, things get simple when the analysis is

limited to a relatively short period of, say, ten to fifteen years, but even in this case many

previous will have to qualify the conclusion.

Distinction between Resources and Reserves:

There is a distinction between “reserves” and “ resource”. The former denotes

material whose location is known or inferred from proven geological evidences and

which can be extracted with available technology. On the other hand “resources”

‘reserves’ as well as materials whose location and quantity are less well established and

which cannot be extracted under the prevailing technological and economic conditions. In
brief, “resources” are the resource endowment of a country.
Classification of resources:

The typical classification of natural resources is (i) Renewable resources; and (ii)

Non-renewable resources, Renewable resources are those which can be used permanently

without depletion; so to say, they are inexhaustible. Non-renewable resources get

depleted by use. The stock gets exhausted with use.

Solar energy is a typical natural flow of resource which can be used without
depletion. On the other hand, biological resources like forest, crop, animal population and

marine life (fish and other aquatic animals) are also renewable resources without

depletion, as the stock can be replenished by means of biological growth. However, if

these resources are produced and consumed at a faster rate than their rate of biological

growth, depletion of the stock would take place, finally reaching the point of zero

resources.

Non-renewable resources are exhaustible resources. The stocks will get depleted

by using them. Examples are minerals deposits, fossil, fuels, etc. In this context, the term

‘exhaustion’ of a resources is defined as state in which the extraction rate falls to zero.

Obviously, a resource is exhausted when there is literally none left. But it could be

exhaust well before then. When the costs of extraction and preparation of one more unit

for market exceed its price, so that there is no incentive for further extraction, the
resources exhausted. In economic terminology, if the marginal cost of harnessing the

resource is higher than the marginal revenue, harnessing (extraction of resources) would

be stopped and the resource is said to be exhausted, as it becomes uneconomical to make

further extraction. Like reserves, exhaustion is a dynamic concept. Anything that would

reduce unit extraction cost or increase its price would encourage further extraction on

once-exhausted resources.

Biological resources represent a separate and complex category of resources.

These resources are crops, forest animals, marine life etc. They use flow of solar energy

and hydrological resources, as well as soil nutrients for their biological growth. They

maintain fragile equilibria independent of humankind. But the people’s manifold

activities manipulate the complex system to have different equilibria. Given the flow of
solar energy, the biological resources are renewable: not automatically self renewing, but

renewable, given human restraint and sound husbandry. Hence, they are characterised as

renewable but destructive.

Resources cannot be considered in isolation, as they have collective interactions

and exchanges amongst them. The renewable resources are very crucial to enduring

human civilization. Modern industrialised technological society requires a vast array of

raw materials which may be supplied in numerous ever changing forms. Most of these

raw material require a reduction into useful states through processes like mining,

harvesting, smelting, refining, processing, fabricating etc. Natural resources which

furnish materials constitute the base of our material wealth. Human activities require the

conversion of materials, constitute the base of our material wealth. Human activities

require the conversion of materials to a useful state and this conversion is possible only at

the expense of energy from coal, oil, natural gas, nuclear power etc., which are by

themselves natural resources.

Earth is a reservoir of resources. But these are unlimited, as the earth itself is

finite. Utilisation of the scarce resources of earth by humankind in such a way that the
resources are not depleted and also maintenance of the quality of environment form the

basis of study and research of ‘Resource Economics’.

Borrowing the terminology of pearce the following are the four categories of natural

resources :

a) Stock –renewable resources;

b) Stock-material resources and energy rsources;

c) Stock energy resources and

d) Flow-energy resources.

a) Stock –renewable resources: This category of resources has a fixed stock at any point

in time, but the stock is renewable through biological reproduction. It comprises

agricultural produce, livestock (largely based on agriculture), and marine resources. If

current consumption of these products does not, for a series of years, exceed the

increase by reproduction of the available quantity of the commodity concerned, the

resource itself will not be depleted. This presupposes that the resources will not be

mismanaged otherwise (as, for example, in the case of land degradation and erosion),

so that its reproductive capacity is maintained.

The magnitude of the potential for agriculture production is relatively smaller in the

indutsialised countries than in the developing countries ; nevertheless, it is still quite

considerable notably in North America, Australia and the industrialized socialist

countries, less so Western Europe, and least of all in Japan. To what extent the unused
potential will be used in the years to come depends on the development of the world

market for agricultural products and on the national policy objectives of the individual

countries, or groups of countries like the European Community.

b) Stock Material resources: For this category of resources, total stock and total

supply in time are fixed. The extraction effort applied to them determines the rate of

flow at which the given stock is being tapped. Future availability can be increased

only by abstaining from present consumption. However, unless the extracted

commodity is transformed in the subsequent production stages in a form which makes

it non-recoverable, recycling and reuse of the material are possible. Pearce (1796,

p.145) includes water as a stock material resource with very high level of recycling.

The mineral resources we are dealing with here may be subdivided again into metallic
and nonmetallic minerals, but even if we were to introduce this distinction the

heterogeneity between the resources would remain very great. The comman

denominator that exist in the case of renewable resources the process of

photosynthesis underlying all vegetal production in lacking in the case of mineral

resources;

c) Stock-energy and flow-energy resources: There is no need to explain the crucial

importance of energy to the present-day world economy. The structure and working

of contemporary human society are inextricably connected with the availability and

use of large quantities of non-human energy. The rather optimistic picture given

above concerning the availability of stock-renewable and stock-material resources-

optimistic at least in the short and medium term is based on the assumption of an

adequate energy supply on conditions as prevailing today. Is it justified, however, to

assume the continued availability of energy in ever-growing quantities, in the various

forms and at the prices now prevailing? The answer is no, in fact particularly in the

long run.
For natural gas, the situation is not unlike that for oil. Middle East oil producers may

be expected to acquire a larger share in world production of natural gas, though part

of of it will be used locally in the region. Again, stabilization of the production level

may be aimed at after an initial expansion of output. As the ultimately recoverable

reserves of natural gas are probably close to half those of crude oil (in terms of energy

content), the share of gas in total world supply is expected to remain about half as

large as the share of oil, or even a bit lower.

Of the fossil fuels, coal is by far the most abundant resources in relation to its actual
level of use. Known reserves are estimated to be 200 time its annual extraction level,

and the ultimately recoverable reserves might surpass the known reserves by afactor

20. Physical availability is not a problem for the time being but problems there are

nevertheless, and in many respects: environmental pollution (both in production and

in use), technical problems in mining and in transportation, high costs of converting

coal into gas or oil, large investment outlays, long lead times, and as a consequence

off all this political hesitation to opt for the coal alternative.

First it is implied that in the coming 10 to 15 years “new” sources of energy

will not alleviate the supply constraints to a considerable extent. The Share of flow-

energy resources in total supply will increase but remain modest in the near future.

Apart from the above classification of resources, there is also another system

of classification, according to which there are three broad categories of natural

resources.

1. Indestructible Class

2. Renewable Class, and

 3. Exhaustible Class

The above system of classification has been developed since Marshal’s time,

although the debate as to which resources, fit in to which class has not finally been

resolved.5

1. Indestructible resources: May be defined as resource stocks, which although they

are not augmentable are not permanently depleted as a result of their productive use.

Recardo, for eg., discussed about ‘original and destructible’ powers of the soil.

There is general agreement that the productive powers of the soil need to be
replenished from time to time, otherwise they become destructible, and the only

indestructible feature of land is its location. Other resources which are normally

taken to be indestructible are the oceans and the atmosphere.

2. Renewable resources: May be defined as resource stocks which being

augmentable may be reversibly depleted in the process of their productive use. They

include fauna and flora and marine life in their natural resources states as well as

domesticated animals and crops.

3. Exhaustible resources : are unlike, indestructible or renewable resources in that

their productive use must involve permanent depletion of the stocks so they may be
defined as resource stocks which are not augmentable and which are always

irreversibly depleted in the process of their productive use. Naturally the most

important category of exhaustible is minerals.

Time is a significant component in the analysis of natural resource use. Time helps

to distinguish between different types of resources. A renewable natural resource is one

that can supply productive inputs to an economic system indefinitely. Non-renewable

“(Exhaustible)” natural resources is one with a finite stock of supply which one used up,

is gone.

Natural Resources Scarcity: A Historical Perspectives

The major theme of economics is the scarcity of resources emerged as a

recognized discipline, more than two centuries ago. Many classical economists have dealt

with the problem of scarcity of resources n the context of prosperity of humankind. We

should not come to the conclusion that scarcity of resources and multiplicity of wants as

the realm of economics is the recent origin. The problem is as old as Adam Smith and
their classical economists, though their method of approach and treatments were different

from modern economists. Many of the classical economists had seen the phases of

Industrial Revolution in England and its consequent effect on the people and resources.

Each generation of economist, since then, had pondered over the question, “to what

extent do natural resource limitations restrain the prosperity for humankind.” In each

generation, not all economists have agreed, but the terms of economic debate have

reflected, as well as influenced the prevailing attitudes towards technology, economic

growth and the human prospect. In this connection the history of economic thought is

received, in brief, relating to resource scarcity, under three headings, viz., the Classical

economists, the Neo-classicals; and contemporary perspectives.

a. The Classical Economists :

The Classical Economists were experiencing and writing when the first phase of the

industrial revolution was drawing to a close. They were fully aware of the

technological progress made, and realized the importance of capital to productivity.

The classicals spoke of three types of resources, viz., Land, Labour and capital. The

first one, viz, land fits in well to be called a natural resource. According to Adam

Smith and his followers the Nature is very bountiful and agriculture is capable of

yielding outputs ‘Stationary State* would be reached if people depended on

agriculture too much and over-exploited it. Though earth can produce very

generously, the social impacts would result in a stationary state. The sum and

substance that can be inferred from the concept of Adam Smith is that Scarcity of

resources acts as constraints to economic growth, as conceived in modern economics.

Imagine for example, an aggregate production function for a whole society relating

the total productivity to the amounts of various inputs used. Obviously, output and

inputs would need to be defined broadly. The classical economists conceptualized the

aggregate production function as taking the form as follows;

Land, denoted by D was defined broadly to include soil and minerals resources (and

thus was a synonymous for ‘natural resources’ as natural resources were understood at

the time). Land was thought to be not only important, but also fundamentally limiting.

David Ricardo was much concerned with increasing population and the consequent

demand for food which implies pressure on agricultural land. According to this

economist, growing demands would force the exploitation of poorer land resources

for agriculture. In this respect, Ricardo recognized only the declining quality of land,

which means declining productivity and not agricultural resources absolutely limited.

According to Ricardo, Scarcity arises due to declining quality of land. On the other

hand, Thomas Malthus who gained the fame by his “theory of population” pointed out

that the resources were much limited. The table of Nature is laid only for few and

those who come uninvited must starve.’ According to this pessimist, the resources are
 absolutely fixed and limited and hence output of food is limited and humankind was

doomed to a standard of living at mere subsistence level. Though there are, lot of gaps

in Malthusian arguments which failed to recognized the role of capital technology and

also the benefits of international trade etc., the need for restricting the population on

par with available resources cannot be disputes. Increased population would result in

intensified cultivation and net result would be diminishing returns. Though production

can be increased with better technology, and available food can be augmented by

means of imports, there is a limit beyond which these techniques cannot operate and
the limited resources set the ceiling for population.

b) The Neo-Classicals:

As time passed, the Industrial revolution continued apace, increasing the importance

of capital in production and substituting mineral raw materials for animal and vegetable

materials. As technological progress continued, it became built into expectations and into

the institutional frame work. Colonialisation supplied raw materials and inexpensive

labour to the colonial powers. Although there were frequent warnings that known

reserves of particular resources were perilously low, new reserves always seemed to be

discovered or substitute resources found and utilized.

Standards of living were improving and for the first time, it could be claimed that

industrialization had made the comman people in industrial society better off.

Land, broadly defined as natural resources, seemed less of a constraint. Land was

considered more important, as it responded to investment. So, there seemed nothing

special or unique about land as a resource. The neo-classical aggregate production

function was usually expressed as follows:

 Y=g (K,L)

Alfred Marshall who bridged the classicals with modern economists, rejected the

notion that scarcity of resources would put a ceiling on economic growth. Though he

recognized law of diminishing returns in agriculture, he emphasized the role of “growth

of organization and knowledge” Which mean increasing technology and innovations

which could prevent scarcity. According to Marshall’s concept, increased technology

would transform ‘diminishing returns’ to ‘increasing returns’ in agricultural production.

J.S. Mill highlighted the importance of non-renewable resources and said that
scarcity of non-renewable resources would be a constraint on economic growth,

irrespective of population growth. He asserted that continued exploitation of earth’s

natural resources to support a large population would force the society to come to a

stationary state with no better or happier people.

c) Contemporary Perspectives:

The Everyday life experiences of the present generation have left an entirely

different impressions on the minds of the modern economists from that of classical

economists. In developed countries production, preogress, prosperity have become the

“norms” of the life. Technological progress pervades the whole economy from farm to

factories. Acquisition of quality education and training has become the avowed aim of

every household.

The modern economist T.W. Schultz, who like many of his contemporary
colleagues, has a strong neoclassical intellectual heritage, has been associated with two

ideas: (i) Labour is a responsive to investment, i.e., development of “ human capital”

increases skill and continued increases in output is possible with further technological
progress, (ii) Even for agricultural, land no longer has any unque significance. Thus, the

“Schiltzian” production function could read, in its most aggregate form as:

In this formulation, ‘K’ is given modern interpretation. Capital is seen as whatever

is created by the act of investment and thus includes physical plant, educated human

minds and bodies, farms and forests that respond to investment and management, and the

technologies embodied in all these productive facilities. The point is that investment is

considered the only fundamental limitation to the capacity of human population to

support itself on this earth. According to modern concepts, natural resource limitation is
not fundamental. They can be overcome by substituting physical and human capital. The

technological innovations generated can be substituted for limited resources.

The modern concept above stated should not give us an impression that

“investment” on physical and human capital could be dragged on to any length so as to

increase the technologies and innovations to substitute the limited natural resources.

There will be a limit for anything. Beyond certain stage, the basis laws of nature would

operate and put a constraints on the whole productive system. In practical life, we see the

environmental crisis, the Arab Oil embargo and the emergence of OPEC (Organisation of

Petroleum Exporting Countries) as an effective price setter for unlimited development

with limited resources.

Theories of Natural Resources’ use:

The scarcity of natural resources and raw materials, and the increasing cost of

exploiting them have made economists to consider many cost of exploiting them have

made economists to consider many theories and models of resources use. All theories and

models emphasis the concept of decision making in optimal use of the resources, i,e.,
optimal use depletion of an endowment. In inter-temporal resource allocation, decisions
made now, help to determine favourably or adversely opportunities in the future. In

making correct decisions, it will be advantageous to consider the future opportunities

costs. Further, inter-temporal allocation decisions for natural resources are not made ion

isolation from other decisions with long term implications. Markets and natural resources

are directly linked to financial markets and markets in capital assets. All this suggests that

inter-temporal resource-allocation decisions to exploit the resources now or to consider

for later, are investment decisions and can be anaylsed with investment theory models.

Optimal use finds expression in many models and theories. Some of these are
given below:

1. Cake Eating Model:

This was propounded by Hotelling. According to this theory, it is imagined that a

finite cake provides an individual with his sole means to substance. Consumption of the

cake connotes depletion of the cake. It is imagined that when the cake is fully exhausted

the life of the individual terminated, as he may not have cake to eat and sustain his life.

If we take the declining marginal utility with its consumption, in the absence of

other forms of preferences, the constant rate of consumption will always be optional. It is

less clear what that rate should be. Longevity of the individual is maximized by frugally
using the cake, adopting a policy of substance. On the other hand, the whole cake can be

consumed immediately, making a pleasant and short-lived life. Now consider the cake

analogous to natural resources. In general, there is a continuous trade-off between

longevity and standard of living.

2. Das Gupta and Heal Model:

 The model of Das Gupta and Heal does not recognize the exhaustibility of

resources. It presumes that one be substituted for another, even if a resource can be

substituted for another, even if a resource get exhausted. Hence this model is against the

“Cake Eating” model where longevity of the consumer terminates with exhaustion of

cake. In short this model gives greater emphasis on ‘renewable resources’ and the

importance of technology, capital accumulation etc., whereby the consumption of

resources can be considerably reduced to have for a longer period. Further, this model

gives more credence to recycling of resources. If renewable resources and also recycling
of resources could sufficiently sustain life, than an exhaustible resources could be

depleted very slowly. This model can be “Conservative Model.”

In a sense, all natural resources are renewable. They are distinguished by the

length of time; it takes a particular resource to be reproduced. Solar energy is an extreme

case; the daily flow of solar radiation to the earth will roughly be constant and continue

for billions each year. Oil deposits take billions of years to be produced by geological

process. For particular purposes, we separate natural resources as renewable such as

water and the atmosphere, and those that are non-renewable such as minerals, oil and gas.

There is however, a caution in this distinction. Most renewable resources can be depleted

or exhausted that is, they cane become non-renewable. A fish population can be

harvested to extinction. Forests can be cut off and the soil remaining eroded to such an

extent that no new tree will service. Ground water can be depleted by extensive irrigation
of agricultural crops. Clean air and water can be destroyed by pollution. The link between

renewable and non-renewable resources is thus very close. If the rate of use of a

renewable resource exceeds the rate of rejuvenation sooner or later, that resource also
may become exhaustible.
 Boulding made a distinction between consumption and capital approach to the use

of resources. The difference between the two is explained in terms of the attitude. In the

consumption approach: I0 Resource is measured by the extent of production extracted

from factors of production for consumption. The G.N.P. is a rough measure, II) The

G.N.P.was not split in to – a) Part derived from exhaustible resources, b) Part derived

from renewable resources. C) How much of it represents effluvia or waste. D) How much

of production is returned as input-again to nature or productive process.

Even in India, all earlier plan documents discussed about exploitation of resources,
with little attention to preservation. It is the flow of consumption goods and services that

mattered. That is why countries spoke about the rate of growth of G.N.P.

As opposed to this, in capital approach, resource is measured by the extent of

nature of and quality and complexity of total capital including human capital that is built-

up.

If the former is income-flow concept, the latter is capital stock concept. Economic

development in the past emphasizing consumption approach has recklessly exploited the

resources causing degradation of nature. It has created fear of Dooms day. There is need

for changed out-look. Resources are important. They should be preserved or conserved.

Exhaustible resources are natural capital belonging to all generations. They are not the

monopoly of the present generation; they should be passed on to the succeeding

generations in tact. There should be equal opportunity for all generations to make use of

them. Keeping resources for eg. Exhaustible resources in tact, needs to be clarified

further. If resources are to be kept in tact over generations, it would suggest no depletion

in the stock hence no use of resource. In that case it ceases to be a resource. What is
suggested is, physical depletion does take place but economic value of the unexploited

resource in nature should be kept in tact.

Natural Resources in the process of Economic Development:

The process of economic development involves the growth of national output. To

achieve an expansion of national output, it is essential to combine natural resources,

human resources and capital. There is no doubt that the existence or the absence of

favourable natural resources can facilitate or retard the process of economic development,

but it is the fact that besides natural resources, a country’s location, her accessibility to
raw materials and markets in other countries, the present state of knowledge about

resources, growth of techniques, the attitudes, of the people to material things willingness

to save and invest productively, combine in the economic advance of nations. It is on

account of this fact that professor W.A. Lewis mentions, “the extent of a countries

resources is quite obviously a limit on the amount and type of development which it can

undergo. It is not the only limit, or even the primary limit.” Most of the underdeveloped

countries with dawn of self rule are embarking on programmes economic development.

They usually have to begin with and concentrate on the development of locally available

natural resources as an initial condition for lifting local levels of living and purchasing

power, for obtaining foreign exchange with which to purchase capital equipement, and

for setting in motion the development process. Natural resources include land, water

resources, fisheries, mineral resources, forests, marine resources, climate, rainfall and

topography. Some of these resources are known to man. For example, the topography of

a region, the size of land surface, the climate, the area under forests, the discovered mines

form a part of the natural wealth about which the people of a country possess the
knowledge. But nature possesses more on its bosom and in order to discover what it
hides, man is required to develop techniques of knowing the undiscovered resources.

Sometimes the use discovery of the use of a resource can immediately increase its use-

value. Monazite sand deposits on the beaches of Kerala and Tamil Nadu had been known

for several decades, nut advances in the science of nuclear energy have made these

resources most valuable and the new use has earned the little of rare earth for these sands.

In short, when we talk about the natural resources of a country, we have obviously in

mind the extent of the known or discovered natural resources with their present uses. But

is is quite possible that with the growth of the knowledge about unknown resources and
their use, the natural endowment may be materially altered.

Another consideration regarding the nature of natural resources is that some

resources, eg., land, water fisheries and forests are renewable and there are other like

minerals and mineral oils which are exhaustible and can be used only once.

Consequently, careful use of the exhaustible resources and maintenance of the quality of

renewable resources like land are a sine qua non in the process of development.

Guiding principles for Resource Development:

The principal objective of resource development is to maximize national output

and for this purpose there b should be optimum utilization of resources not only in the

short period but in a sustained manner. Towards this end various guiding principles have

been evolved for resource development viz.

1) Economic use of resources to achieve minimum waste: Such wastes as inability to

make use of by-products, inability to works a mine fully due to backwardness of

techniques, failure to reclaim cultivable wastes and the failure to use the abundant

resources fully due to lack of appropriate techniques etc., should be minimized;

2) Sustained use of economic resources through conservation of renewable resources

and economic use of exhaustible resources;

3) Multi-purpose use of resources; if a certain resource has a number of uses, it is

necessary to have all the uses, as for example, multi-purpose river valley schemes

should include irrigation, power supply, flood control, navigation, etc.

4) Integrated planning in the use of natural resources: While executing a multipurpose

irrigation project, simultaneous execution of connecting channels so as to make

maximum use of water for irrigation, setting up of new industrial enterprises to make
use of electric power, etc.

5) Location of industries with a view to reducing transport costs to the minimum. This is

particularly important in the case of weight-losing raw materials like coal; and

6) Abundant supply of energy resources, specially electric power so as to utilize other

resources in the possible manner.

7) Ecologists have recently brought forth the necessity of adopting another principle

viz., the exploitation of natural resources should not result in the disturbances of the

ecological balance. The unintended side effects of economic development have to be

avoided or controlled. They include: Mismanagement of natural resources, large

scale deforestation, the unplanned discharge of residues and wastes, the handling of

toxic chemicals resulting in growth of slums and expansion of settlement activities.

The above guiding principles of resource development emphasize the least-cost

principle so as to achieve sustained economic growth.
 From the foregoing analysis we can say that natural resource are the important

factors for economic development of any country/state and their conservation or

economic use has assumed great significance now a days in every country.
 CHAPTER-III
THEORIES OF EXHAUSTIBLE RESOURCES
A CRITICAL REVIEW

3.1 Introduction

Since Quarrying activity is concerned with the mining of exhaustible resources, it

is worthwhile to study the theory of mining and evolve conditions of optimum utilization

exhaustible resources keeping in view inter generational equity. Natural resources require

a separate study, though the same economic tools are employed here too. Because, (i) A

large set of policy issues, today concern natural resources perse. An understanding of the

economic principles behind resources use is an invaluable aid to informal discussion of

these practical problems, (ii) Natural resources have unique features, not found in other

resources important among these are non-renew ability and common property, and (iii)

Decision taken in the case of natural resources involves inter-temporal considerations.

Exhaustibility introduces some new problems and issues in to the analysis of

production from mining (or Quarrying) that do not araise in the production of

reproducible goods, such as agricultural crops.

A mine owner must determine not only as to how to combine variable factor

inputs such as labour and materials with fixed capital as does the farmer but also how

quickly to run down the fixed stock of ore reserves through extraction of mineral. A unit
of ore extracted today means less in total is available for tomorrow. Time plays an

important role in the analysis. Each period is different because the stock of the resource

remaining is different in size. What we are concerned with an economic analysis of non-
renewable resources is how quickly the mineral is extracted, what the flow of production

is over time and when the stock will be exhausted?

3.2 The Theory of Mine (Quarry):

Let us take an example of individual mine (quarry) which operates under perfectly

competitive conditions. Suppose the mine owner is interested in maximizing the profit by

extracting ore and selling it in the same way as producer of a reproducible good. Since

the extraction of ore is spread over years, he has to maximize the difference between the

present value of the stream of revenue and the stream of cost. The general rule for

maximizing the profit is equation of marginal stock which is foxed in quantity modifies

the revenue and marginal cost. The fact that the mineral maximization conditions are in
three ways. The owner of the mine is faced with an opportunity cost, which an ordinary

producer of a reproducer and or a reproducible good or crop does not face, it is the cost of

using the fixed stock at any point of time or being left with smaller remaining reserves.

To maximize profits the mine owner must cover this opportunity cost of depletion. For a

comman producer the profit maximization rule is MR=MC=P. (Marginal Revenue =

Marginal Cost= Price). For the mine owner it is the price P=MC + opportunity cost of

depletion, where the opportunity cost is measured as the value of unextracted resource

and it is called “resource rent”.

The second fundamental difference between the mine owner and the ordinary

producer is concerned with the value of the resources rent over time. This can be

illustrated with a simple example of investigating money (or fixed sum of money). It

depends on expectation of the investigator about the rate of return on that amount and the

increase in its value over time. He invests in that asset which will yield to him highest

return. However, under perfectly competitive conditions and with no uncertainty, all

assets must earn the same return when in equilibrium situation.

 Consider that there are two assets, A and B. A’s value increases by 5% every year,

while B’s increases by 10% every year. Then no one would invest in A. Every one would

want asset B. The demand for asset B increases, hence its price rises, while the price of A

would fall until their rates of return are equalized.

Here the rate of return to exhaustible resource i.e. rate of return to the mine is the

resources-rent. When there is a positive discount the rent is positive and rises in nominal

value as depletion occurs. If the resource rent does not increase in value over the time, no

one would purchase the mine because the rate of return on alternative asset would be
more valuable. In addition, the owner of an existing deposit would attempt to extract all

ore as quickly as it is technically feasible. He will hold on to ore in the ground only when

that increases in value at a rate less than that can be earned on, say, a savings account.

Alternatively if the value of the ore is growing at rate in excess of what one could earn in

the an alternative investment there is no incentive to extract at all, ore left in the ground

in then more valuable to the mine owner than ore extracted. To have mineral extraction

then, the rental value of the mineral must be growing at the same rate as that of the

alternative assets.

There in one final condition imposed on the mine owner that does not occur with

the reproduction goods. The total amount of the natural resources extracted over time

cannot exceed its total stock of reserves. This is called the stock constraint.

3.3 “GRAY’S Theory of Mine”:

One of the earliest analyses of the mineral extraction was appeared in 1914 in an

article by L.C. Gray. In his model, he has shown how the owner of a small mine has to

decide as to how much ore to be extracted and for how – long a period of time. To solve
this problem, Gray made an attempt with number of simplifying assumptions, viz;
1. Market price of a unit of the minerals remains constant over the life of mine.

2. The producer knows the exact amount of reserves in the mine prior to extraction.

3. All the ore is of uniform quality.

4. The extraction costs then depends only on the quantity removed.

Gray considered the mine of a huge block of pure copper, where the price per ton

is constant forever, while the marginal cost of cutting of piece of copper rises with the

size of piece cut off. If one ton of copper is cut off, it will cost Rs.500/- to remove, if 10

tons are cut-off at once, the extraction costs could be Rs.10,000/-. The economic problem
is to cut-off appropriate quantities in each period in order to maximize the present value

of profits available from the stock of the mineral. The model has practical appeal because

in many mineral markets relatively constant prices have prevailed over long periods of

time.

To determine the efficient extraction path for mine, Gray starts with a simple

illustration. Suppose, the mine will operate for two periods only. The mine owner must

determine how much copper to chop-off the block today and tomorrow, using the three

conditions identified earlier for the two period case. These conditions can be stated as;

1. Price= MC + rent in each period

2. Rent today= the present value of rent tomorrow.

3. Extraction today + Extraction tomorrow = total stock of reserves.

 Figure

The solution is shown in figure 3.1 Assume that the mine has U shaped average

cost curve (AC) and upward sloping marginal cost curve (MC) over some output range.
The constant price is shown as “P”. Output today is designed as Q(o), output tomorrow is

Q(T)where T signifies the end of the mining operation the length of time the mine

operates (in this case, two periods).Given these curves and the total stock of ore, there

will be a unique solution to the extraction problems that satisfies all three conditions.

The mine owner must pickup an initial output level where P=MC+rent. The

resource rent obtained at the output level Q(o) is R(o), This is the condition 1. Here, that

condition 1 defines rent as a difference between price and marginal cost. In the next

period extraction must equal to Q(T) and the rent will be R(T). It must be the case that

R(o)=R(T)/(1+r) where r is the market rate or discount rate, the rate of return on any

alternative assets. This is the condition.

3. If the rent rents did not rise at the rate of interest, extraction would not occur in both

the periods, if the rent rose more slowly than the interest rate, the entire stock of ore

would be extracted in the initial period and the proceeds of the sale invested in some

other assets whose value would rise at the rate of interest (eg. a savings account). If the

rent rose faster than the rate of interest the entire stock of ore would be held in the
 ground until the last moment in time and then extracted. In this case the mine is worth

more, unextracted, because the rate of the return in holding ore in the ground exceeds

the return on alternative investments. Unless the rental value of the mine is growing at

exactly the same rate as the value of other assets, exaction will either be as a=fast as

possible or deffered as long as possible.

Finally, output today and tomorrow must be chosen such that Q(o)+Q(t)=S, where S

is the stock of mineral reserves. This is the condition 3. For a given S,R, and p, there will

be only one level of initial output and hence final output that satisfies all these conditions.

It can be extended to many periods of operation but the same three conditions must

be met. In addition, we can also know as to when the mine will cease its operations, -how

long T is from figure-1, it is not a co-incidence that Q(T) is at the point where MA=AC.

This point is called “terminal conditions” for the non-renewable resource extraction

problem.

Average cost and marginal cost are equal at Q(T), and Q(T) is also that output

which combined with Q(o) exhausts the mine. In the many periods case the time for

depletion will be such that all the three extraction conditions are satisfied plus the

terminal condition.

3.4 Profit Maximization for the Mine:

Profit Maximization involves the method of making revenues larger in relation to

costs of production. There is a series of revenues minus costs each year or period in to the
future. Each instant in time is slightly different. Since depletion of the stock is occurring

year by year, discount with the current interest rate makes each annual profit value

comparable to others, till the date from the beginning of extraction. In the absence of
discounting profit in year say 8, in the future would not comparable with profit in year

say 11. Each nominal value is different at any point of time in the absence of discounting.

Even if the assumption of homogenous quality of the ore is relaxed the result

remains the same. In that case, extraction cost increases not only with the quantity of ore

extracted but also with quality of ore.

If we assume that best quality is found on the top layer and the inferior quality is

found in the bottom, to extract the inferior quality ore, the price has to rise. Otherwise

extraction will stop. Once the best quality is extracted, continued extraction reduces the
stock. Extraction is a state whose extraction becomes zero. This is difference between

physical extraction and Economic extraction. If price is very low as not to cover even

cost of extraction, activity stops, though the ore is not completely exhausted this is called

economic exhaustion. This is what is highlighted by the Gray’s theory.

3.5 Hotelling’s Theory:

In 1931 Harald Hotelling, wrote a classical paper which examined the optimal

extraction of non-renewable resource from the view point of a social planning agency

that had as its goal the maximization of social welfare from the production of minerals.

The model was at the industrial level rather than of the single mine owner. Hotelling also

arrived at the same condition for the efficient extraction of the mineral. When he dealt

with an industry rather than a single mine, the mineral price can go longer be treated as

constant. Rather assumed that the industry faces a negatively sloped demand curve. The

greater the industrial output the lower the price to be. Hotelling assumed that price would

adjust the mineral market at any given point of time. It must be in equilibrium. Supply

must be always equal demand. The present value of unit of homogeneous but finite stock
of mineral must be identical regardless of when it is extracted. This principle reflect the
conditions 1 and 2 which may be called flow condition, together with the stock condition

and terminal condition, the optimal extraction plan for the non-renewable resource can be

determined at the industry level as well as for the single mine.

Hotelling viewed the problem how to extract a fixed stock of a natural resource

from the advantage point of government social planning agency. He showed that a

competitive industry facing the same extraction costs and demand curve as the

government and having perfect information about the resources prices will arrive at

exactly the same extraction path determined by each firm acting independently in the
competitive industry and will yield the same social optimal extraction path.

Hotelling assumed that prices would adjust so that a mineral market would be in

equilibrium at every point in time; supply must always equal demand. As before,

1. The stock of mineral reserves is known size

2. All unites of the minerals are homogeneous,

3. We assume a unit of stock costs “C” rupees to extract and refine and that this cost is

constant for all units of stock in the reserves endowment “S”, Once again it is as if we

had a huge block of copper that cost “C” per ton to “chip-off”

We want to find the rate of extraction that maximizes social welfare and

completely exhausts the stock. If c=0 the analysis is qualitative unchanged If “c”

increases with the quantity extracted. We are back with Gray’s cost assumption.

The crucial distinction between Hotellings model and Gray’s model is that we
must examine the demand curve explicitly and derive a unique price of the resource in

each period ((0), Q(1), Q(2), Q(3), ……………..Q(t).) When the mineral industry is in

operation.
 The planner will want to measure the change in the social surplus as one unit

extracted as one more unit extracted in simply the difference between the market price

and the marginal cost of extraction “c”.

 Figure

The above figure 3.2 illustrates one pair of outputs for the two periods which will
satisfy this condition, given “D”, the demand curve and c and r. Here the flow condition

implies that the mineral price must rise over time. In this model, with a stationary

demand curve, the only way the price and hence the rent will rise, as if the quantity

extracted declines over time. Therefore extraction in period (t+1) must be less than that in

period (t) to ensure the price rises.

As price rises the rent per ton grows over time at a rate equal to the rate of interest.

This is often referred to as Hotelling’s simple rule.

We have sketched the price paths in figure. How do we know the path shown is

the one that maximizes social welfare? All that Hotellings rule say is that “rent must

grow at the rate of interest”. Might there be dozens of different paths all of which satisfy

Hotellings rule? Yes, but a unique path of output can be derived with the help of stock

constraint and terminal condition.

Figure
 If costs constant the planner will want to ensure that all extraction mineral is

removed. If any ore is left in ground the mine owner will be foregoing rents. The constant

cost assumption is crucial in this argument. Each unit of ore costs the same for extraction.

We can also see in the figure 3.3 the linear demand curve. There is some price say
P. at which no one is willing to buy more of the mineral. The price P is often called choke

price meaning that demand for the good is choked off at this point. Ideally the planner

would seek to have the last unit of output extracted at P. To do otherwise would deprive

the society of maximum benefits. We can then work backward from P, given the fixed

stock S, to find just that initial output Q(O) which will over time decline so that rent

increases at rate ‘r’ and outputs sum to the stock of reserves. Only one such extraction

and hence rent path exists. It will yield the largest amount of social surplus available to

society and hence be the optimal plan. In addition, we can now determine the length of

time the mine operates. The point at which the price path intersects price P will determine

the unique duration of the extraction profile T. Once the price reaches P, there will be no

more demand for the mineral, so extraction will cease. Extraction ends at time T.
 CHAPTER-IV

PROFILE OF THE STUDY AREA

4.1 Location of the District:

Gulbarga district is located in the north-eastern part of the Karnataka state and

covers a vast area of table-land that lies between longitudinal parallels of 760 and 04
minutes east and 770 and 420 minutes east and latitudinal parallels of 160 and 12 minutes

North 17 and 46 minutes north. To the North West, for a short stretch the district shares

its borders with Solapur and Osmanabad districts of Maharashtra state and to the east it is

bounded by the districts of Medak and Mehaboobnagar of Andra Pradesh state. On the

other three side, Gulbarga districts is surrounded by territories belonging to Karnataka

state itself i,e Bidar district in the north, Raichur district on the south and Bijapur district

on the west. It is only in the south that the district has natural boundary in the form of the

mighty Krishna River which runs to the east by north-eastern course. On the western

sector, part for a short distance the Bhima River divides the lands belonging to the

districts of Gulbarga and Bijapur and forms the natural boundary between the two

districts.

The district is situated in the region which is generally known as the Deccan

Plateau. As per the physio-agronomic classification of the areas within the state,

Gulbarga belongs to the northern maidan region. The district consist of Deccan traps and

sedimentary rock formations. The characteristics rock types found heare, are hard and

compact black rocks called Basalts.

Map
 The Krishna and the Bhima are the main rivers of the district. Of these, the Bhima

itself a tributary of the Krishna flows into it at the south –eastern top of the district.

The length of Krishna river in the district is about 150 kilometers. At a place

known as Jaldurg Falls, about 3 kilometers downstream near Narayanpur in Sorapur

taluk, the river cascades down a fall about 65 meters. Near to this spot a dam is being

constructed under the Upper Krishna Project (UKP).

The Bhima is also a holy river which flows through the district. It flows towards

southeast across the district for a length of about 225 kilometers and has a total drainage
of 70,614 square kilometers.

The main geological formations met with in Gulbarga district are:

1. Pleistocene and Recent (consisting of soil and laterite, alluvium and recent

Conglomerates);

2. Tertiary (composed of Deccan traps and inters trappers and intra-trappeans and intra-

trappeans),

3. Puranas (composed of upper Bhima Shales and sand stones); and

4. Archaean (comprising peninsular genesis with associated younger granites) and

Dharwad schists. Overlying the deccan traps and the Bhimas, there are thick spreads

of black soil, some of which are as deep as 10 meters at places like Akandhalli,

Yetnal, Kanchapur and Wadi. In the area occupied by granites, the soil varies from

loamy to sandy. Pebbles of chert, limestone, shale and granite are frequently found
embedded in these soils. Coarse gravely soils with spreads of quartz, and feldspar are

also found at few places.

4.2 History of the District:

 Gulbarga district encompasses a vast geological are and as may be expected

contains a few places of historical importance as well as a few which find a mention in

the Hindu mythology. For instance, the river Krishna and Bhima which traverse through

the district are held to be of divine origin and are regarded as sacred in view of

legends associated with them. The village Narayanapura located on the banks of the

Krishna is associated with legends concerning “Chaya” and “Surya”. Sage Agastya and

so also Rama are believed to have visited the village Narona.

Historical accounts reveal that sovereignty of the district was under the Satavanas,
Chalukyas, Vakatakas, Rasthrakutas, Kalachuryas, Yadavas, Hoysalas, Khilji, Tuglaq,

Bahamani, Mughalas and Nizam rule.

Gulbarga district can be truly proud of its association with Rastrakuta dynasty for

the capital of the Rashtralutas which was for a long period located at Malkhed a village in

Sedam taluk then known as Manyakhed. King Amoghvarsha-I more popularly know as

Nrupatunga (814-878 AD) is believed to have developed Malkhed into a beautiful and

sprawling city. This king is renowed for his literary achievements, “Kavirajmarga” a

work of prosody in Kannada.

After the establishment of the British suzerainty, Gulbarga districts remained a

part of the Nizams dominions. The Badar Raja Venkatappa Naik Surpura who fought a

valiant but vain battle against British is even to this day remembered as a great hero who

sacrificed his life in the freedom struggle. Subsequently, as a result of police-action in

1948 Nizam dominion became a part of the Union of India.

4.3 Area and population:

 The district was a part of old Hyderabad state and was later integrated with the

new Mysore state (now Karnataka) which came into existence on 1st November 1956, the

district along with its existing 10 talukas viz, Afzalpur, Aland, Chincholi, Chitapur,

Gulabarga, Jevergi, Sedom, Shahpur, Shorapur formed a part of Mysore state.

The name Gulbarga is referred to mean a leaf with a flower in Persian language as

‘Gul” means leaf. It is also known as Kalburgi which means a stony land or stone roofing

or a help of stones in Kadamba language.

Amongst the 27 districts of Karnataka State, Gulbarga happens to be the first

largest and ranks 1st in area. According to the village records as reported by local officers,

aggregate area of the villages and towns of the districts in 16,174 sz.kms. The total area

of the district is unevenly distributed among 10 talukas. In terms of area, Jevergi (1,822

sq.kms) is largest taluka and it is closely followed behind by sorapur (1,820 sq.kms.)

These two talukas together account for 22.51% of the total area of the district.

The talukas of Chitapur, Aland, Gulbarga, Yadgirand shahpur each of which has

an area slightly more than the taluka average are medium sized, and the remaining three

talukas of chicholli, Afzalpur and sedam are small sized. With an area of 1025 kms

(6.34% of the total area of district) Sedam taluk happens to be the smallest taluk of the

district.

Table 4.1

According to the 2001 census the total population of Gulbarga district is

_____________ persons and since there are 10 talukas in the district the average

population of a taluka is __________ persons. In terms of population gulbarga ranks 1st

and chitapur follows as second, while Afzalpur occupies bottom most, that is the 10th
place. The population of Gulbarga taluk alone – which is ____________ accounts for

______ of the total population. Sedam and Afzalpur hold 9th and the 10th places. The

population of these talukas constitute _____ and _______ of the district total.

4.3.1 Rural-Urban Composition:

4.4 Mineral Resources:

The district possesses rich deposits of many minerals useful for industrial

development. The most important mineral is the limestone which is found in chitapur,

sedam and jevergi talukas. Gold occurs in crude condition either associated with quartz
veins are reeps or alluvial gold in the sands of the rivers flowing in the district.

Mangalore in Sorapur taluk is particularly noted for gold. Quartz of pure quality is

available in Yadgir and Sorapur talukas. Red ochre suitable for pigments occurs in

Jevargi, Sorapur and Yadgir talukas, Fuller’s earth is found at Korvi near Chincholi the

other mineral resources found in the district are potters clay, granites, gneisses and trp

rocks, gypsum iron ore, mineral pigment, moulding-sand copper clay calcite etc.
4.4.1. About Quarrying:

A variety of lime-stone suitable for flooring and roofing is also available in the

district in large quantities. The deposits are now being exploited by a few north Indian

firms and are taken out of the district. These stones are exceptional quality and are very

decorative, owing to their pleasing colours. As there is good demand for flooring and
roofing slabs a few local entrepreneurs can, with profit take up the manufacture of

polished stone slabs.

Meaning of the Terms used:

Quarry: Squared stone of an open excavation or limestone. Sometime also to

underground extractions of such surface working or for material usually taken from the

surface working or for material usually taken from the surface.

Mine: Denotes undergrounds workings.

Quarrying: Denotes superficial, open workings be called banks or pits rather than

quarried. To dig or take from or as from a quarry as to quarry marble quarrying i.e., the

business or occupation of extracting stone, marble, slate etc., from quarries.

Mining: Act or business of marketing or of working mines.

Quarrying means getting stone from the underground and softing it in the size for
construction purposes, fencing, grapes, cultivation, and is also used for building (stone)

flooring and also road construction in the form of Khadi.

4.4.2. Background of quarrying activity:

Quarrying has been carried on in seven out of ten talukas of Gulbarga district. The

district being backward region, the amount of rainfall is quite scanty and its distribution

is often unpredictable and undependable. Hence agriculture is not a paying proposition.

Affected by sever and frequent conditions, people have turn to quarrying as a substitute.
The district exhibits peculiar and varied activities in respect of quarrying. In Chitapur and

Sedam talukas most of the quarries are engaged in supplying limestone to the cement

industry. There are 5 big cement plants located in this region viz., TATA, Birla
Vasavdatta, Rajashree A.C.C.

In other talukas excepting three talukas Afzalpur, Aland and Yadgiri, Quarrying is

undertaken to supply various kinds of building materials like Katagal (building stones,

uncut-stones) used for plinth or filling dam and some time even in construction of wall.

Grape poles, stone pillars used in grape yard (farm) to support grape creepers, Hyder-

corner stones in construction of buildings, parcy plate used for flooring and then Bandi

used in the construction of water reservoirs. Citapur and Sedam talukas are famous for

the best quality parcies (flooring stones) in different forms known as blue fine, golden

blue, silver white. The flooring stones available in Balavadagi revool and Shabad (in

Chitapur taluk) and Hooda, Miran Batagera in Sedam taluk have the finest qualities of

flooring stones with beautiful colours shades. There is no necessity of polishing these

stones. They have very good demand within the state as well as in the neighboring state

like Andhra Pradesh, Tamil Nadu, Maharashtra etc.

Quarrying exhibits a variety of practices with regard to the relations among

owners and the quarry workers. In Jevergi taluk especially the relation is kin to
agricultural tenancy. The owners of the pit enter into an agreement with the workers for
sharing the quarrying work. Normally the surface is cleaned of bushes and shrubs by the

owner, while the digging and the removal of stone plates from the quarries is the work of

labourers. They are paid advances to maintain themselves during the quarrying work.

Marketing is done by both the owner as well as workers at the place of production. The

revenue ultimately is shared between the owner and the worker. This is a kind of tenancy

system in the quarrying activity. Once the pit is exhausted the worker move to other pits

near-by. The workers along with their families stay near the pits, erecting temporary

sheds. In other 5 talukas viz. Chitapur, Sedam, Gulbarga, Shahpur, and chincholi
quarrying activity exhibits a factory type of relationship. At all the stage of quarrying

viz., cleaning, digging, removal of stones, shapping of stones according to building

requirements, wage paid labour is employed. Workers is the quarries are mere labourers

getting wages for the work done. The owner bears all the expenses and takes the profit.

The living conditions of the workers in the two situations are same.

Though quarrying activity is referred to in the history even during the days of

Nizam of Hyderabad, it was a private venture without any regulation by the government.

Stones are natural resources found in abundance, people used to get these materials for

their private requirements without any obstruction from anybody. With the growth of

population, demand for building materials increased, people not only developed pits in

their own fields but also entered the government lands, thus regulation become necessary.

In the post independence period, the government made attempts to control the quarrying
activity introducing the royalty and rent system. Owner had to pay nominal deposits and

royalty to undertake in their own lands. If quarrying activity is carried in government

lands in addition to deposit and royalty, they have to pay rent on the land used. The
royalty and rent vary depending upon the type of material quarried. For flooring stones
royalty is very high, going up to Rs.600,000/- while building stones it is as much as

Rs.25,000/- per stipulated period.

The development programmes taking place in Gulbarga district have affected

quarrying activity in both ways. The construction of dam and canals increased the

demand for rubble stones and that has increased employment opportunities for quarry

workers. More pits have come up and work is available for more people for longer

period. On other hand, irrigation has affected quarrying activity adversely. Water has

spread on a larger area, making quarrying difficult. Removal of water, bushes and shrubs,
has become costly and not worthwhile. Some have abandoned quarrying activity-facing

water logging. Technology also has its effect on quarrying. In some pits we find use of

cutting and polishing machines which not only reduce the hard task of labourers, but also

increase precision in getting flooring stones. But some have expressed the fear that

employment of machine for polishing and cutting result in greater wastage. Hence they

prefer manual handling of quarrying work. It is found that quarrying is carried on in

government lands. This result in the loss of revenue to the government. The government

has to regulate the quarrying activity not only to ensure regular and continuous

employment to the poor workers but also the revenues for the state.

Quarrying has also implication for anti-poverty programmes. It may help many

people to get continuous employment, thus enabling the people to cross over the poverty

line. Since there is ever growing demand for housing on the hand and abundant natural

resources on the other, it may become an ideal strategy for employment.

4.5. Socio Economic Scenario of the Study Area:

A total of one hundred quarry establishments spread over seven talukas of

Gulbarga district, have been selected for collection of data. Since quarrying is heavily
 concentrated in Sedam, Chitapur, and Jevargi taluka, nearly 75% of respondents are

drawn from these three talukas. The taluka wise distribution of respondent is given in the

table 4.2.

Table- 4.2

Taluka-Wise Distribution of Respondents

Name of the Jevargi Shahpur Surapur Gulbarga Chitapur Sedam Chincholi Total

Talukas

Number of 22 11 5 7 26 26 3 100

respondent

Sources: Field investigation (June-August 2010)

Even in each taluka those villages where quarrying activity is predominant are selected.

Thus the respondants are chosen from 39 villages spread over 7 talukas

Table 4.3

Quarry exhibits a variety of some relations among quarry establishment in some

such relations are akin to Agriculture that is an owner of the pit, and the worker there-in

share the activity of expatiation digging, shaping and to some extent marketing, and

finally share the profit, on the other hand the owner of the pit either individually or on

partnership basis takes the responsibility of quarrying activity digging, shaping,

marketing etc, by hiring worker on wage basis. He ultimately bags the profit. This is the

type of industrial relationship, owner-worker relationship found in some establishment to

have better picture of the quarrying economy. The respondents are further classified into

i) Owners and ii) workers or laborers.

Table - 4.4

Distribution of Respondents by Ownership and Worker status

TALUKAS OWNERS WORKERS TOTAL

Jevargi 11 11 22

Shahpur 06 05 11

Surapur 02 03 05

Gulbarga 03 04 07

Chitapur 13 13 26

Sedam 13 13 26

Chincholi 02 01 03

Total 50 50 100

Sources: Field investigation (June-August 2000)

Quarrying activity has expanded beyond the owned lands to cope-up with

increased demand. Entrepreneurs have taken land on lease or paying royalty to

government land and in some cases three-four partners together have taken land on lease

belonging to the private people. The table 4.5 is a cross section of respondents on the

basis of owned land, Government land and Partnership land.

Table-4.5

Table showing Ownership of Quarry Land

 Talukas
Type of
Jevargi Shahpur Surapur Gulbarga Chitapur Sedam Chincholi Total
Ownership

Own land 9 6 1 3 9 10 01 39

Govt. land 1 1 1 Nil 02 01 Nil 6

Partnership 01 01 Nil Nil 1 2 Nil 5

Total 11 8 2 3 12 13 1 50

Sources: Field investigation (June-August 2010)

It is worthwhile to into the socio-economic status of the respondents engaged in

quarrying activity, before probing further in to the economics of quarrying.

During the last quarter of the last century, the government was striving hard to

improve the conditions of poor and weaker sections of the society. Almost all the people

engaged in quarrying are back-ward. Their caste composition is given below.

Table-4.6

Caste Status of Quarry Owners

Talukas
Castes Total
Jevargi Shahpur Surapur Gulbarga Chitapur Sedam Chincholi

S.C. 04 01 01 Nil 03 02 Nil 11

S.T. Nil 01 Nil 01 02 01 Nil 5

OBC 02 01 Nil 02 01 03 Nil 9

FC 05 03 01 01 07 07 01 25
Total 11 06 02 04 13 13 01 50

Sources: Field investigation (June-August 2010)

The table 4.6 indicate that even among owners, half of them, are respondent from

poor and weaker section, we can contrast this with the caste status of the workers (Table

4.7).

Table-4.7

Caste Status of Quarry Workers

Talukas
Castes Total
Jevargi Shahpur Surapur Gulbarga Chitapur Sedam Chincholi

S.C. 05 01 01 02 05 03 01 18

S.T. 01 NIL Nil 01 03 06 NIL 11

OBC 05 01 01 01 03 03 01 15

FC 01 01 01 Nil 02 01 Nil 06

Total 12 03 03 04 13 13 02 50

Sources: Field investigation (June-August 2005)

The table 4.7 shows that nearly 90% of the workers belong to poor and weaker

sections.

The table 4.8 and 4.9 gives the details of Educational status of the owners and

Educational status of the workers.

Table 4.8

Educational Status of Owners

Educational Talukas Total

 Status Jevargi Shahpur Surapur Gulbarga Chitapur Sedam Chincholi

Illiterate 2 3 1 1 2 2 Nil 11

Primary 2 1 1 1 2 2 Nil 09

Higher 2 2 NIL 2 3 3 1 13

Primary

Secondary 1 1 1 Nil 2 2 Nil 07

College 3 Nil Nil 1 3 3 Nil 10

Technical Nil Nil Nil Nil Nil Nil Nil Nil

Course

Total 10 07 03 05 12 12 01 50

Sources: Field investigation (June-August 2010)

As is natural, most of the owners of the quarry pit are not educated. 22% of them

are completely illiterate. The developmental programmes in education of the Government

even after five decades have not reached them. As against this, the educational status of

the workers gives a picture which is worst than this.

Table 4.9

Educational Status of Workers

Educational Talukas
Total
Status Jevargi Shahpur Surapur Gulbarga Chitapur Sedam Chincholi

Illiterate 07 02 02 02 09 09 02 33

Primary 03 01 01 01 02 07 Nil 11
Higher 01 Nil Nil Nil 01 01 Nil 03

Primary

Secondary Nil Nil Nil Nil 01 01 Nil 02

College 01 Nil Nil Nil Nil Nil Nil 01

Technical Nil Nil Nil Nil Nil Nil Nil Nil

Course

Total 12 03 03 04 13 13 02 50

Sources: Field investigation (June-August 2010)

In this case 2/3 of (66%) of the workers are completely illiterate.

It has been noted earlier that the quarrying activity in Gulbarga District presents a

variety of relations. As such, it is appropriate to consider major relations in depth. For

that purpose the economics of quarrying from the point of view of owners, and

economics from the point of view of workers have been “X” rayed here.
 4.6 Economics of Quarrying “Owners”

The data are collected from 50 owners collected from 7 talukas of Gulbarga district.

Table-4.10

AREA OF QUARRYING ACTIVITY in “Acre’s”

Talukas Jevargi Shahpur Sorapur Gulabarga Chitapur Sedam Chincholi Totol

Quarry land 136 46 11 26 247 351 18 835

in acre’s
Sources: Field investigation (June-August 2010)

Table 4.10 reveals that the quarrying activity is carried on 835 acres. Among the 7

talukas Sedam leads with 351 acres, followed by Chitapur 247 acres and Jevargi with 136

acres. These three constitute 88% of the area. Sorapur has the lowest area that is only 11

acres. Over this entire area there are 935 pits where quarrying activities are undertaken.

Approximately there is more than one pit for every one acre of land.

Table-4.11

Taluka-wise distribution of quarrying pits (at present)

Talukas Jevargi Shahpur Sorapur Gulabarga Chitapur Sedam Chincholi Total

Pits (No.) 90 40 6 15 354 410 20 935

Sources: Field investigation (June-August 2010)

Quarrying is going on in this district for a more than a century; though in Sedam and

Chitapur, it is three or four century old.

In this case of quarrying activity the owner enters in to an agreement with workers

regarding cleaning, digging, shutting, nesting etc. Following are the provisions under the

agreement in five out of seven talukas.

Conditions of Agreement:

1. It is the responsibility of the owner to clear the surface from bushes and weed before

quarrying is undertaken. It is at the cost of the owner.

2. The workers are required to bring all the implements like, hammer, pickaxe, basket,

etc.

3. The workers are required to open up the pit step by step, layer after layer, to get the

flooring stones of different sizes.

4. A pit can be exploited by a group or two of workers.

5. The stones removed from the pits are paid according to the size and quality of stones.

6. In general a worker gets Rs.70/- per 100 Sq.ft. stones removed.

7. There is scope for using machines in bringing out stones fore-ground. This would

reduce the strenuous task of the workers. In such cases a worker is paid only Rs.30/- if

machine is employed.

8. It is the responsibility of the owner of marketing the quarry output, for example Parcy,

Katgal, Hydar etc.

9. Payment will be made on the basis of the amount of work done every week.

10. The period of work for the workers is not clearly defined; they can join or leave work

at any time. However if workers have taken advance from the owner, he is not

allowed to leave work in the middle.

11. The owner of the pit is responsible for all the unforeseen, contingencies, and he

should amend for them.

12. All other expenses are borne by the owner, like, Fee, Royalty, Rent, etc.

13. Though not a part of the agreements the owner advances loans to workers to meet

their family religious, socio and cultural needs. The advance is recovered in

convenient weekly or monthly installments.

14. If the workers are drawn from distance placed, the owner provides the transport

facilities to bring them to the place of work. Once they come to the place of work,

they fix their tents or improvised hut-mets, till the work is completed. If the work is

stopped due to some calamities, the owner sends them back to their respective places

by providing transport facilities at his cost.

In Jevergi and Sorapur talukas, conditions of agreement are slightly different, as

mentioned below:

1. Initial expenses of cleaning work done will be shared by the workers and they share
the ultimate surplus/profit with owner.
2. The workers are not paid on the basis of work done but they share the ultimate surplus
with the owner.
3. It devolves on the worker that he should also make effort to market the quarry output.
Hence it becomes the joint responsibility of both owner and worker to find market for
the quarry output. Other conditions are the same for all talukas.
 CHAPTER-V

WORKING OF QUARRY INDUSTRY IN GULBARGA DISTRICT: AN

ECONOMIC ANALYSIS OF QUARRY OWNERS

5.0 Introduction:

In this chapter, the economics of quarry industry working in Gulbarga district is

analyzed from the point of view of quarry owners. Further, an attempt is also made to test

the hypothesis H1: “The people (owners) engaged in quarrying activity are not aware of

the ultimate impact of exhaustibility of resources on living standard of the people” and

H2: “the people engaged in quarrying activity are not aware of the environmental impact

of their activity.”, Which helps us to derive the suitable conclusion and suggestion for the

purpose of suitable policies.

5.1 Production Pattern of Quarry Output

Quarrying is essentially concerned with the exploitation of nature and extraction

of various stone-materials-for used in construction of buildings, canals, bunds etc. In

Gulbarga, we find different kinds of building materials are extracted. They are in the

form of Katagal, Grapepole, Hyder, Parcy, Bandi, Chavani and Khadi. A brief

descriptions of these are given here viz..

1. Katagl: Usually Katagals are used for construction of building, basement of building,

etc. These are not of uniform size.

2. Grapepole: These are used in the form of pillers in grape farming for erecting mantapa.

The pillers used in grape farming are of 9 to 10 ft in length.

3. Hyder: The quarry supplies stone bricks of different sizes varying between 1 and 2 ft.

They are called Hyder. The corners of the walls in the house are generally constructed

with these stones, to make the walls very strong.

4. Parcy: For flooring also stones are supplied by quarry called parcies. They are also

different in size. They also vary in size and form to 1X1 to 2X2, to 2X4 feet etc.

5. Bandi: These are crude type of parcies which are longer, wider and thicker, than

parcies. Their normal size is 6X2 feet and bigger size is 8X6 feet.

6. Chavani: Chanvani is the parcy type of stone, which is usually used upon door,

window, frames. Part of the stone protrudes outside, and serves as a wind and the rain

screen (Weather Board).

7. Khadi: Whatever remains at the end in the quarry is supplied as Khadi for many

purposes; say for example, road construction.

The following table gives an idea of various type of quarry output produced in

seven talukas of Gulbarga district during the period 2005-2010.

 Table-5.1 combined picture of “Quarry” in 7 talukas of Gulbarga District

(2005-2010)

Name of Type of Quarry Output

the
Katagal (in Grapepole(in Hyder(in Parcy(in Bandi(in Chavani(in Khadi(truck)
Talukas
No.) No.) No.) sq.ft..) sq.ft.) No.)

Jevargi 35,50,200 1,41,520 2,00,100 55,60,000 33,20,500 Nil 500

Shahpur 1,20,100 Nil 46,200 80,87,000 41,23,500 Nil Nil

Sorapur 2,00,000 Nil 4,600 11,400 2,930 2,800 Nil

Gulbarga 5,000 Nil 1,100 72,40,000 4,00,000 Nil 1,100

Chitapur 4,00,100 Nil 7,000 4,61,60,000 8,00,000 Nil 6,400

Sedam 5,19,400 Nil 5,00,600 4,60,00,000 30,22,000 Nil 9,200

Chincholi 2,000 Nil 2,220 12,80,000 17,600 Nil 240

Total 47,96,800 1,41,520 7,61,820 11,43,38,400 1,16,86,530 2,800 17,440

N.B.: The figures in the brackets indicate the number of sample.

Source: Field investigation- July-August-2010

In Gulbarga district among ten talukas only in seven talukas we find quarrying

activities. In the area of west belt, Jevergi and Sorapur talukas are producing more

Katagal, Grapepole and Chavani, because in those talukas stones are hard comparing to

the stones of east belt quarries.

East-belt talukas i.e. Sedam, Chitapur and Chincholi are producing more Parcy

and Bandi which are used for flooring. Since these are having thin layers. Gulbarga and
Shahpur talukas are also producing substantial quantities of Parcy and Bandi materials of

equally good qualities.

Diagram 5.1 to 5.5 shows the clear picture of various types of quarry output by the

owner’s talukawise in Gulbarga district.

Diagram 5.1 showing the average physical output of quarries during the period 2005-2010

Katagal (in no.)

4000000
3550200
3500000
physical output (in no.)

3000000

2500000

2000000

1500000

1000000
519400
400100
500000
120100 200000
5000 2000
0
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 5.1 indicates talukawise production of Katagal in Gulbarga district. Among all

talukas, Jevergi has produced more than 70% of its total production i.e., 35,50,200 stones

followed by Sedam 5,19,400; Chitapur 4,00,100; Sorapur 2,00,000 and Shahpur 1,20,100. In

Gulbarga and Chincholli it was very less, with only 5,000 and 2,000 stones.

Diagram 5.2 showing the average physical output of quarries during the period 2005-2010
 Hyder

600000

500600
500000
Physical output (in no.)

400000

300000

200100
200000

100000
46200
4600 1100 7000 2220
0
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli

Name of Talukas

Diagram 5.2 indicates taluka wise production of Hyder in Gulbarga district. Among all

talukas, Sedam has produced highest amount of Hyder stones i.e., 5,00,600, followed by Jevergi

2,00,100; Shahpur 46,200; Chitapur 7,000; Sorapur 4,600; Chincholli 2,220; and Gulbarga taluka

with 1,100 stones.

Diagram 5.3 showing the average physical output of quarries during the period 2005-2010

Parcy (in sq.ft.)

50000000
46160000 46000000
45000000

40000000

35000000
Physical output(in sq.ft.)

30000000

25000000

20000000

15000000

10000000 8087000
7240000
5560000
5000000
1280000
11400
0
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli
Name of Talukas

Diagram 5.3 indicates taluka wise production of Parcy in Gulbarga district. Of all seven

talukas where quarry activity is going on Gulbarga district is famous for Parcy production,

particularly of the type called Shahabad (Parcy) stones. These stones are called by the terms

Golden blue. Silver white etc. Sedam and Chitapur talukas has produced highest output of Parcy

i.e., respectively 4,60,00,000 sq.ft. and 4,61,60,000 sq.ft., followed by Gulbarga 72,40,000sq.ft.,

Jevergi 55,60,000 sq.ft., Chincholli 12,80,000 sq.ft., and Sorapur 11,400sq.ft.

Diagram 5.4 showing the average physical output of quarries during the period 2005-2010
 Bandi(in sq.ft.)

4500000
4123500
4000000

3500000 3320500
3022000
physical output (in sq.ft.)

3000000

2500000

2000000

1500000

1000000 800000

500000 400000

2930 17600
0
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas

Diagram 5.4 indicates taluka wise production of Bandi stones in Gulbarga district.

Shahpur has produced highest amount of Bandi i.e., 41,23,500 sq.ft. followed by Jevergi

33,20,500 sq.ft. Sedam 30,22,000 sq.ft., Chitapur 8,00,000 sq.ft., and Gulbarga 4,00,000 sq.ft.

bbut Chincholli and Sorapur have produced 17,600 sq.ft. and 2,930 sq.ft. of Bandi only.

Diagram 5.5 showing the average physical output of quarries during the period 2005-

2010
 Khadi

10000 9200
9000
Physical output (in trips)

8000
7000 6400
6000
5000
4000
3000
2000 1100
1000 500 240
0
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 5.5 shows the production of Khadi materials in different talukas of Gulbarga

district. Khadi is the remaining a part after preparing the all materials, which is used for dams,

and road construction purposes. In Khadi production Sedam taluka is having first place i.e. 9,200

trips followed by Chitapur 6,400 trips, Gulbarga 1,100 trips, Jevergi 500, Chincholli 240 but

Shahpur and Sorapur has nil production of Khadi.

5.1 Income from Quarrying Activity:

 The income of the owner is derived from the sale of his quarry output. The prices of

different types of quarry output such as Katagal, Grapepole, Hyder, Parcy, Bandi, Chavani,

Khadi etc. are as follows:

1. Katagal: This is a small brick type stone, used in building. Its price ranging from Rs.350 to

400 per tractor load and Rs. 800 to Rs. 900 per truck load, which works out to be 2 to 4 rupees

per piece.

2. Grapepole: These are the poles used to suppoet grape creepers and also to fence the grape

yard. These poles vary from 6 to 10 ft. in length. Their prices vary from 24 to 30 rupees each

depending upon the size. The average price is usually 27 rupees per pole.

3. Hyder: These are the cut stones used in building. These are used as corner stones. The normal

size of a Hyder is 2X1X4(2/3cft.) It is sold for 8 to 10 rupees per stone. An average sized

building would require 100 pieces of Hyder for onstruction.

4. Parcy: This is a flat stone used for flooring. Each stone is of the size of 2X2 with thickness

varying from 1” to 2”. It is sold at 14 to 20 rupees per piece depending upon the thickness,

colour, and quality of the pieces. Parcy is the output of quarry which is much is demand. Major

income of the quarry is from sale of Parcy only.

5. Bandi: These are the crude type of parcies, which are longer, wider and thicker than parcies.

Their normal size is 6’X2 with 3” (1/4-3 cft) Each piece is sold for 50 rupees, bigger ones with

8’ in length are sold for 80 rupees per piece.

6. Chavani: Chavani is a Parcy type of stone used over the door and window frames, with part

of stone protrudes outside, and serves as a wind and rain screen. Its price varies from 15 to 20

rupees per piece.

 We have analyzed below the income earned by the owners from sale of quarry output.

The table below shows taluka-wise income of quarry output.

Table 5.2 showing the average income of the quarry output for seven talukas of Gulbarga

district.(Average of 5 years, 2005-2010)

Name of
Types of Quarry output
the
Talukas
Katagal Grapepole Hyder Parcy Bandi Chavani Khadi

Jevargi 5380600 1730300 710200 10180000 7068000 - 35300

Shahapur 272400 - 182000 33345000 7664000 - 10000

Sorapur 620000 - 19000 25000 6830 45300 -

Gulbarga 7,000 - 6000 21020000 1128350 - 40650

Chitapur 680800 - 30000 138220000 2082450 - 25600

Sedam 688600 - 2206400 146832000 9077600 - 312000

Chincholli 2,500 - 10000 4200000 50200 - 8920

Total 7651900 1730300 3163600 353822000 27077430 45300 432470

N.B. : Figures in the bracket against villages, indicate the number of samples

Source: Field investigation July-August-2010

From the above table, it is clear that in Gulbarga district income from sale of Parcy is

maximum, followed by Bandi and Hyder. Jevergi takuka is special for Grapepole production and
Sorapur for chavani. These two output are not seen in other talukas. Sedam and Chitapur are

famous for Parcy production. They produce good qualities of parcies called silver white, Golden

blue, Bottem blue etc. The average income of all the talukas is Rs.5,62,74,714.

Diagrams 5.6 to 5.10 reveal the income earned by quarry owner in different talukas of

Gulbarga district which are self explanatory.

Diagram 5.6: showing the average income of quarries during the period 2005-2010

Katagal

6000000
5380600

5000000
Income (in Rs.)

4000000

3000000

2000000

1000000 620000 680800 688600

272400
7,000 2,500
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 5.6 clearly shows the taluka wise picture about the income from Katagal

in Gulbarga district. In case of Katagal, Jevargi taluka fetches highest income i.e., Rs.53,80,600,

which is more than 65% of the total income of the Gulbarga district. Sedam has income
Rs.6,88,600, followed by Chitapur Rs.6,80,800, Sorapur Rs.6,20,000, Shahpur Rs.2,72,400, and

Gulbarga Rs.7,000 but chincholli Rs.2,500 only.

Diagram 5.7 showing the average income of quarries during the period 2005-2010

Hyder

2500000
2206400

2000000
income (in Rs.)

1500000

1000000
710200

500000
182000
19000 6000 30000 10000
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

The Diagram 5.7 reveals the talukawise income from Hyder in Gulbarga

district. In Sedam, it is Rs.22,06,400, followed by Jevargi Rs.7,10,200, Shahapur

Rs.1,82,000, Chitapur Rs.30,000, Sorapur Rs.19,000, Chincholli Rs.10,000 and Gulbarga

taluka it is only Rs.6,000.

 Diagram 5.8 showing the average income of quarries during the period 2005-2010

Parcy

160000000 146832000
138220000
140000000

120000000
Income (in Rs.)

100000000

80000000

60000000

40000000 33345000
21020000
20000000 10180000
4200000
25000
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 5.8 shows the talukaswise income from Parcy production in Gulbarga

district. Among all the talukas Sedam taluka has got highest income from Parcy output

i.e. Rs.14,68,32,000, followed by Chitapur Rs.13,82,20,000, Shahapur Rs.3,33,45,000,

 Gulbarga Rs.2,10,20,000, Jevargi Rs.1,01,80,000, Chincholli Rs.42,00,000, and Sorapur

only with Rs.25,000.

Sedam and Chitapur talukas are the highest producer of parcies and getting and

getting more income, announcing income more than 80 % of total income of the district.

Diagram 5.9 showing the average income of quarries during the period 2005-2010

Bandi

10000000
9077600
9000000
8000000 7664000
7068000
7000000
Income (in Rs.)

6000000
5000000
4000000
3000000
2082450
2000000
1128350
1000000
6830 50200
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 5.9 shows the income from Bandi output in different talukas of Gulbarga

district. Sedam taluk fetches highest income from Bandi i.e., Rs.90,77,600, followed by
 Shahapur Rs.76,64,000, Jevargi Rs.70,68,000, Chitapur Rs.20,82,450, Gulbarga

Rs.11,28,350, Chincholli Rs. 50,200, and Rs.6,830 only in Sorapur.

Diagram 5.10 showing the average income of quarries during the period 2005-2010

Khadi

350000
312000
300000

250000
Income (in R s.)

200000

150000

100000
35300 40650
50000 25600
10000 8920
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 5.10 shows the clear picture of income from Khadi material in different

talukas of Gulbarga district. It is the highest in Sedam taluk i.e 3,12,000 followed by Gulbarga

Rs.40,650, Jevargi Rs.35,300, Chitapur Rs.25,600, Chincholli Rs..8,920 but in Sorapur taluk

Khadi income is nil.

5.3 An Analysis of Quarrying Expenditures and Profit:

Since quarrying work is managed by the owner himself, he has to shoulder all the

expenditures in respect of production and marketing of output. The main items of the

expenditure which the owner has to bear are as follows:

i) Government fees: The owner has to pay royalty to the government to carry on quarrying in his

land. The royalty depends upon the type of quarry output. For parcies royalty is very high i.e.,

(Rs.2,60,000 per acre) for Katagal and Hyder and Rubble it is very low (for one acre of quarry

land it is Rs.50,000/-) Royalty has to be paid every year. It is fixed charge levied upon the owner.

ii) Fees (Rent): If the owner wishes to carry on quarrying on government land, he has to obtain it

on lease by paying Rent or Fees. Rent is also levied on acreage basis. Where Parcy is produced

rent is high and where Katagal or rubble is produced it is low i.e., Rs.45,000 per acre.

iii) Clearing Expenditures: He has to incur expenditure on cleaning the land from bushes, shrubs

etc., before commencing quarrying activity. On an average, he has to spend 16 to 18 thousands

Rupees, for getting the land ready for quarrying.

iv) Wage: An important part of the expenditure incurred by the owner is the wage. Workers are

paid on the basis of the output produced by usually (piece rate) and not on daily wage basis. The
worker on an average gets Rs.200 per 100 sq.ft. On the other hand, if worker is assisted by

machine, he gets only Rs.75/- for 100 sq.ft. of quarry work.

v) Transport expenditure: Normally quarry workers are drawn from near by villages. Sometime

if workers are brought in bulk from distance places, their movement to the place of production

will be the responsibility of the owner. He has to bring them in a lorry or truck. The transport

expenditure depends up on the distance covered.

vi) Administrative expenses: Quarry work is spread over a wide area in different pits and

temporally over the period. This calls for appointment of managers and accountants to supervise

the quarrying operations and maintain accounts relating to output produced, workers employed

and amount of work done by them, from time to time, and sale of output and maintaining of

stock register, etc. The Managers/Accountants are, on an average paid a monthly salary of

Rs.4000/-.

Hence the total expenditure is split into two broad categories. As given below:

A) Fixed Expenditure: Consisting of Government fees, Royalty, Rent, Salary for managers

etc. and

B) Variable Expenditure: Covering wages paid to workers on piece rate basis, transport and

other incidental expenditure etc.

The expenditure in 7 talukas are analyzed as below:

 Table -5.3: Taluka wise Expenditure Pattern of Entire Gulbarga District

(Average for 5 years, 2005-2010)

Sorapu Chinchol
Items Jevargi Shahpur Gulbarga Chitapur Sedam
r li

Income 2510440 4147340 71613 2220200 14103885 15911660 427162

0 0 0 0 0 0 0
Fixed
1202728 14322
Expenditur 7782364
6 6 7104640 36670101 46143814 854324
e

Variable

Expenditur 1054384 1824829 24348 128148

7548680 42311655 47734980
8 6 4 6
e

Profit 1119781 32942 213581

6778188 7548680 62057094 65237806
8 0 0

N.B. Figures in the parentheses are percentage figures of respective expenditure.

Source: Field investigation July-August 2010

In the above table the seven talukas of the district are arranged in descending
5.4 Marketing of Quarrying output and Problems:

Most of the quarry output is sold on the spot of the pits only. The consumers and the

agents of the factory owners, who undertake polishing of stones, purchase at the pit level

only. It is for this reason that the quarry output is sold at a low price, because buyers in fixing

the prices of the quarry output is sold at a low price, because buyers in fixing the prices of the

quarry output do take in to account, the cost of transportation from the pit to places of

consumption. There is scope for increasing the share of the quarry producers if they take up

transport themselves. Sometimes a lower price of the quarry output is due to the advances

taken by the owners from the buyers or dealers. This will reduce the bargaining power of the

producer owner. A third reason for the low price is prior contract entered into with buying

agencies to supply a specific quantity of output. Since the agreement is made well in

advance, it does not provide any scope for changes and hence they cannot alter the agreement

according to the changing demand and supply conditions.

The demand for the quarry output is a local demand from builders and contractors. In

Sedam and Chitapur talukas most of the demand is from outside the state i.e., from

Maharashtra and Andhra Pradesh.

 In Sedam and Chitapur talukas merchants from other states, especially from Maharashtra

and Andra Pradesh have a depot (agencies) to buy from the local pits and transport them to

the places of demand outside the state.

Quarry producers are facing difficulties due to lack of good roads and communication

facilities, especially in Jevargi. In this regard Sedam and Chitapur are better situated. In other

talukas, pit are found in remote villages which are not connected with roads, Gulbarga itself

is a backward district in North Karnataka Region and lack of infrastructure is a problem

which quarry owners face. The following table shows about the opinion of the quarry owners

regarding transport facilities in Gulbarga district. The fact that 52% of the owners have not

complained about transport problems is due to

i) They sell their output at the pits and

ii) There are already good road existing to their places.

Table

The opinions of the quarry owners regarding transport facilities in Gulbarga district.

(In percentage)

Talukas

Particulars Jevargi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli Total

Transport 8 04 02 01 05 03 1 24

Problem

No 03 03 Nil 03 07 10 Nil 26

problem
Total 11 07 02 04 12 13 01 50

Source: Field Investigation (July to August 2010.)

Table: Marketing effort by owners and workers

Talukas
Sellers
Jevargi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli Total

Owner Nil 14 Nil 07 24 26 Nil 71

Worker Nil Nil 04 Nil Nil Nil Nil 04

Both 22 Nil Nil Nil 01 Nil 02 25

Total 22 14 04 07 25 26 02 100

Source: Field Investigation (July to August 2010.)

Marketing of quarry output is appeared to be mostly the responsibility of the owner. In the
study area, 71% of the owners themselves shoulder the entire responsibility of selling the
quarry output. However, workers also are giving them a helping hand in effecting larger
sales. In Jevargi taluka entire output is marketed by both workers and owners.
 Table: Showing Clientele of Quarry output

Talukas
Clientele
Jev Shah Sor Gul Chit Sedam Chinch Total %
Direct 37.50
22 14 4 7 22 22 2 93
Consumer
32.45
Agents 6 14 - 7 23 26 2 78

16.00
Contractors 3 6 - 4 9 16 1 39

Officers 1 2 - 1 5 11 - 20 08.00

Engineers - 3 - - 6 8 1 18 07.00

Total 32 39 4 19 65 83 6 248 100

Source: Field Investigation (July to August 2010.)

The above table shows that much of the demand for quarry output comes directly from the

consumers (38%) , followed by agents of consumers (32%), contractors (16%) Officers (8%) and

engineers (7%).

Table: Demand for quarry output (class-wise)

Talukas
Categories
Jev Shah Sor Gul Chit Sedam Chinch Total %

Upper Class 05 07 - 05 21 24 02 64 30.20

Middle Class 21 14 03 07 25 24 02 96 45.30

Lower Class 20 12 01 06 02 12 01 54 24.50

Total 46 33 04 18 48 60 05 214 100

Source: Field Investigation (July to August 2010.)

From the study it is found that, the class wise break up of demand for quarry output is 20%

from upper class, 45% from middle class and about 25% from lower class.

Allied Issues Connected with quarrying:

The important issues connected with quarry activities are

1) The effect on Environment,

2) Availability of the exhaustible resources for future and

3) The way in which the area is to be used in future once the quarry is fully exploited.

Problems of Exhaustibility of the Quarry Resources:

Table: Showing –Opinion of owners regarding exhaustibility of resources:

Talukas
Opinions
Jevargi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli Total

Exhaustible 10 06 01 02 6 6 01 32

Non-
01 01 01 01 6 7 01 18
Exhaustible

Total 11 7 2 3 12 13 2 50
 Source: Field Investigation (July to August 2010.)

Regarding the exhaustibility of resources, 38% of the quarry owners expressed their view that

the resource is in abundance in relation to its demand, and hence there is no fear of its exhaustion

even in next 500 to 600 years. However, 62% of the owners have expressed that it is going to be

exhausted in view of rapid urbanization and population, but they do not have any idea about

when it would be exhausted.

Future of Quarry Land after the Exhaustion of Resources:

Table: Utilization of Quarry land after Quarrying

Talukas
Particulars
Jevargi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli Total

Utilization 07 02 04 02 05 02 01 23

Waste Land 15 12 - 05 20 24 01 77

Total 22 14 04 07 25 26 02 100

Source: Field Investigation (July to August 2010.)

As regard to third question, 77% of the owners have felt that the land after the resource is

exhausted becomes unfit for any use, it it has no resource left behind and becomes unfit for

cultivation. It becomes barren land, wasteland. Whereas 33% of the owners felt that a thin layer

of the soil on the pits may help in raising light crops. Floriculture, can be taken up, it water is not

a bottle neck even bajra, sun flower can be raised.

Impact of Quarrying on Environment

Table: Effect on Environment

(Opinions of respondent owners)

Talukas
Effects
Jevargi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli Total

Bad effects - 02 01 01 03 01 - 08

No effect 22 12 03 06 22 25 02 92

Total 22 14 04 07 25 26 02 100

Source: Field Investigation (July to August 2010.)

The investigation has shown that as per the opinion on 92% of the owners, the quarry

work has no harmful effect on environment, even in areas talukas of Chitapur and Sedam where

quarry work is carried on in intensive scale, and no harmful effects are noticed. When quarry

output is used in cement industry as intermediate input, it may result in ash spreading in the

environment. Even that also has not produced any advers environmental effect on the dwellers,

around.

5.6 Working of Quarrying Industry: An Assessment

The Analysis of this chapter has brought to the light two things which are at least known.

Viz, 1) The bountifulness of nature, though man does not and cannot do anything to replenish

nature, has given him numerous benefit. In particularly Quarries offer varieties of stones to be

used for building dams. Being concern with nature Quarry industry akin to Agricultural industry

and in quarry exploitation relations between Owners and workers are of a tenancy type
relationship. 2) Contrary to the general belief, people engage in Quarries (both owners and

workers) earn a lot. The average income of a owner of a quarry ranges from Rs.2,00,000 in

Sorapur to Rs.6,00,000 in Sedam and average income for the entire district is around

Rs.30,00,000 per year. This is not a small sum.

Quarry resources being very extensive in nature, the owners of the quarry pits feel that

these will not be exhausted even in the next five to six hundred years. Hence there is no fear of

their early extinction.

Incidentally, the analysis of this chapter helps to accept the first H1 and Second H2 set

for the study. Hence Hypothesis: H1 and H2 are established and accepted.
 Chapter- VI

POSITION OF QUARRY WORKERS IN GULBARGA DISTRICT:

AN ECONOMIC ANALYSIS

6.1 Introduction:

Economics of quarrying cannot be understood without the analysis of workers,

who have in many pits, equal stake in the activity. In this connection, an attempt has been

made to analyze the economic position of quarry workers working in Gulbarga district

and tried to test the two hypothesis i.e. H3: “ The workers working in quarrying activity

do not earn sufficient activity do not earn sufficient income to lead a decent standard of

living”; and H4: “ The workers working in quarrying activity are exploited by the

owner,” for the purpose of policy perspectives.

6.2 Physical output produced by workers:

The workers employed in quarry industry are paid piece rate wages on the basis of

different kinds of quarry output produced by them. It was noted earlier that wokers paid

Rs.200 to 300 sq.ft. of stone (i.e. for Parcy and Bandi etc.) and in the case of Katagal,

Grapepole, Hyder, Chavani and Khadi, income derived from these was shared equally

with workers by the owners.

The following table gives the details of quarry output produced by the workers

during period 2005-2010. The Katagal, Grape-pole, Hyder and Chavani stones are

expressed in numbers, where as Parcy and Bandi are expressed in sq.ft. and Khadi is

expressed in terms of number of trucks loads.

 6.1 Average Physical Quarry output produced by workers in Gulbarga district

(Aggregate Position)

(Average for 5 years, 2005-2010)

Katagal (in Grapepole Hyder (in Parcy (in Bandi(in Chavani

no.) (in no.) no.) sq.ft.) sq.ft.) (in no.) Khadi (truck)

Jevargi 1738000 29620 43600 872000 672000 - 420

Shahapur 9400 - 5800 2026000 1286000 - 260

Sorapur 320600 - 4200 3550 1860 4200 -

Gulbarga 5200 - 680 2786428 328350 - 820

Chitapur 21525 - 7800 11065784 1541424 - 3220

Sedam 30150 - 33560 14146450 1344856 - 7238

Chincholli 825 - 1750 926561 13658 - 220

Total 2125700 29620 97390 31826773 5188148 4200 12178

N.B. The figures in the bracket indicate the number of samples used for study.

Source: Computed fro Primary data.

The table 6.1 shows that in Gulbarga district Jevargi and Sorapur talukas are the major producer

of Katagal, (in Jevargi 17,38,000 and Sorapur 3,20,600 number). Jevargi taluk is famous for

Grapepole production because in this area stones are hard which are suitable for Grapepole.

Sorapur taluka has been producing maximum of Chavani stones. Sedam, Chitapur, Gulbarga,

Shahpur are the major producers of Parcy, (in Sedam producing being 1,41,46,450 sq.ft.
followed by Chitapur 1,10,65,784 sq.ft. Gulbarga taluk 27,86,428 sq.ft., Shahpur 20,26,000

sq.ft., Chincholli 9,26,561 sq.ft. Jevargi 8,72,000 sq.ft. ) but in Sorapur it is negligible.

Diagrams 6.1 to 6.5 shows the clear picture of various types of quarry output produced by

workers talukaswise in Gulbarga district

Diagram 6.1: Talukawise output of Katagal in Gulbarga District

Katagal (in no.)

2000000

1800000 1738000
Physical output (in Numbers)

1600000

1400000

1200000

1000000

800000

600000

400000 320600

200000
9400 5200 21525 30150 825
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 6.1 revels talukaswise Katagl production in Gulbarga district. Among all

the talukas Jevargi and Sorapur talukas producing highest number of Katagal (i.e.17,38,000 and

3,20,600) followed by Sedam (30,150) Chitapur (21,525) ans Shahpur(9,400) but Gulbarga and

Chincholli talukas production is very negligible. In Jevargi and Sorapur areas, stones are thick

and hard which are suitable for Katagal production.

Diagram 6.2: Talukawise output of Hyder in Gulbarga District

 Hyder (in no.)

50000
45000 43600

40000
Physical Output (in No.)

35000 33560

30000

25000

20000
15000
10000 7800
5800
4200
5000 1750
680
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Above diagram 6.2 shows the talukaswise production of Hyder in Gulbarga district.

Jevergi and Sedam largest producer of Hyder i.e., 43,600 and 33,560 in number. Chitapur has

produced 7,800; Shahapur 5,800; Sorapur 4,200; Chincholli 1,750 amd Gulbarga taluk produce

only 680 stones in number. These Hyder stones are used for building and pillar construction

purpose.

Diagram 6.3: Talukawise output of Parcy in Gulbarga District

 Parcy (in sq.ft.)

16000000
14146450
Physical output (in sq.ft.)

14000000
12000000 11065784

10000000
8000000
6000000
4000000 2786428
2026000
2000000 872000 926561
3550
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 6.3 shows the talukawise production of Parcy in Gulbarga district.

Gulbarga district is famous for Parcy production of the type called “ Shahabad Stone”. In this

district, Sedam and Chitapur produce largest number of Parcies that is 1,41,46,450 sq.ft. and

1,10,65,784 sq.ft. These two talukas have produced more than 80% of the total output of Parcy.

Gulbarga taluk produced 27,86,428 sq.ft. followed by Shahpur 20,26,000 sq.ft., Chincholli

9,26,561 sq.ft. and Jevargi 8,72,000 sq.ft. but Sorapur talukas production of Parcy is very less

that is 3,550 sq.ft.

Diagram 6.4: Taluka wise output of Bandi in Gulbarga District

 Bandi(in sq.ft.)

1800000
1600000 1541424
1344856
Physical output (in sq.ft)

1400000 1286000
1200000
1000000
800000 672000
600000
400000 328350

200000
1860 13658
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 6.4 depicts the talukawise production of Bandi stones in Gulbarga

district. Chitapur has produced 15,41,424 sq.ft. of Bandi stones followed by Sedam 13,44,856

sq.ft. Shahpur 12,86,000 sq.ft. Jevargi 6,72,000 sq.ft. Gulbarga 3,28,350 sq.ft., Chincholli 13,658

sq.ft. and Sorapur only 1,860 sq.ft.

Diagram 6.4: Taluka wise output of Bandi in Gulbarga District

 Khadi (truck)

8000
7238
7000
Physical output (in trips)

6000

5000

4000
3220
3000

2000

1000 820
420 260 220
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 6.5 shows the talukawise output of Khadi materials in Gulbarga

district. Whatever remains in the end of quarry materials that is called Khadi. These are used for

dam and road constructions. Khadi production is very less in Sedam and Chitapur with 7,238 and

3,220 in trips. Production of Khadi in other talukas is very less and negligible.

6.3. Analysis of Income of the Quarry Workers:

 The income of the Quarry worker is the price that he receives from the

owner for the output he produces. It is a piece rate wage. In Jevargi and Sorapur talukas the sale

proceeds of quarry output are shared equally between the owner and the worker. While in other

owners pay piece rate wages to the workers.

Table 6.2

The comparative picture of quarry income to the workers in Gulbarga district

(average for 5 years 2005-2010)

Name of Types of Quarry output

the
Talukas
Katagal Grapepole Hyder Parcy Bandi Chavani Khadi Total

Jevargi 20,36,350 3,88,400 96,400 7,36,200 5,67,000 - 7,200 38,31,550

Shahapur 11,700 - 12,400 15,08,600 9,76,000 - 3,860 25,12,560

Sorapur 4,28,000 - 9,200 3,650 2,200 5,200 - 4,48,250

Gulbarga 8,600 - 4,200 19,27,500 1,90,125 - 12,300 2,142,725

Chitapur 21,300 - 16,400 81,14,250 11,19,200 - 51,350 93,22,500

Sedam 36,860 - 68,300 86,05,375 12,36,775 - 1,10,510 1,00,57,820

Chincholli 980 - 3,650 5,99,500 9,600 - 3,600 6,17,330

Total 25,43,790 3,88,400 2,10,550 2,14,95,075 41,00,900 5,200 1,88,820 2,89,32,735

Total Income: Rs.2,89,32,735

Average Income Rs.2,89,327

Note: The figure in the bracket indicate the number of samples used for study.

Source: Computed from primary data.

 Table 6.2 reveals the composite position of all seven talukas of Gulbarga

district in respect of average income of quarrying workers during 2005-2010. Average annual

income of all talukas was Rs.2,89,327. Among these quarry material Parcy gives the highest

income that is Rs.2,14,95,075, followed by Bandi Rs.41,00,900, Katagal Rs.25,43,790,

Grapepole 3,88,400, , Hyder 2,10,550, Khadi Rs.1,88,820 and Chavani Rs.5,200 in a year.

Diagram 6.6 to 6.10 reveal the income earned by quarry worker in

different talukas of Gulbarga Distrcit, which are self explanatory.

6.6 Talukawise income of the workers from Katagal stones in Gulbarga District.

2500000

2036350
2000000
Income (in Rs.)

1500000

1000000

500000 428000

11700 8,600 21300 36860 980

0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas
 40000 36,860
35000
30000
in come in Rs

25000 21,300
20000
15000 11,700
8,600
10000
5000 980
0 0
0

Taluks
The digram

6.6 reveals the talukawise position of the income from Katagal stones in Gulbarga district.

Jevargi and Sorapur fetches highest income i.e. 20,36,350 and Rs.4,28,000 respectively. Whereas

in other talukas it is less. Sedam Rs.36,860, Chitapur Rs.21,300, Shahpur Rs.11,700, Gulbarga

Rs.8,600 and Chincholli taluka has only Rs.980.

6.7 Talukawise income of the workers from Hyder stones in Gulbarga District.
 120000

100000 96400

80000
Income (in Rs.)

68300

60000

40000

20000 16400
12400
9200
4200 3650
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas

Diagram 6.7 shows the talukawise income from Hyder in Gulbarga district.

Again Jevargi taluk fetches highest income to the workers in this respect i.e. Rs.96,400 followed

by Sedam Rs.68,300, Chitapur Rs.16,400, Shahpur Rs.12,400, Sorapur Rs.9,200and Gulbarga

Rs.4,200. But Chincholli taluka has only Rs.3,650.

 6.8 Talukawise income of the workers from Hyder stones in Gulbarga District.

10000000

9000000 8605375
8114250
8000000

7000000
Incom e (in R s.)

6000000

5000000
4000000

3000000
1927500
2000000 1508600
736200 599500
1000000
3650
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

The above 6.8 Diagram reveals the talukawise income from Parcy production in

Gulbarga district. Here Sedam taluk fetches highest income i.e., Rs. 86,05,375, followed by

Chitapur Rs.81,14,250, Gulbarga Rs.19,27,500, Shahpur

 6.9 Talukawise income of the workers from Bandi stones in Gulbarga District

1400000
1236775
1200000 1119200

976000
1000000
Income (in Rs.)

800000

567000
600000

400000

190125
200000

2200 9600
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

From the above diagram it is clear that regarding income from Bandi production in

Gulbarga district, Sedam taluk fetches highest income i.e. Rs.12,36,775, followed by Chitapur

Rs.11,19,200. Shahpur Rs.9,76,000 and Jevargi Rs.5,67,000. In Chincholli and Sorapur, it is very

less, i.e. Rs.9,600 and Rs.2,200 respectively.

 6.10 Talukawise income of the workers from Khadi stones in Gulbarga District

120000
110510

100000

80000
Income (in Rs.)

60000 51350

40000

20000 12300
7200
3860 3600
0
0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Diagram 6.10 shows the talukawsie income earned by Khadi materials in

Gulbarga district. In Khadi income, Sedam fetches more income i.e, Rs.1,10,510, followed by
Chitapur Rs.51,350, Gulbarga Rs.12,300, Jevargi Rs.7,200, Shahapur Rs.3,860, Chincholli

Rs.3,600 and in Sorapur Khadi production is nil.

Table-6.3 Average annual income of Quarry owners and workers

(Taluka wise)

Workers income as
Owner income Workers income
Talukas a % of owners
(Rank) (Rank)
income

Jevargi 12,87,356 1,56,817 12.2

Shahapur 26,72,735 3,52,382 13.11

Sorapur 2,10,080 78,680 36.21

Gulbarga 32,42,486 3,06,575 9.77

Chitapur 56,68,196 3,25,525 5.72

Sedam 62,62,326 4,29,439 8.11

Chincholli 20,15,695 2,50,396 12.35

N.B.:The figures in brackets indicate the ranking positions of talukas.

Source: Field investigation.

Table 6.3 shows the ranking position of seven talukas. Among these from the

owner side, Sedam taluka stood first followed by Chitapur (Second), Shahpur (third), Gulbarga

(fourth), Chincholli (fifth), Jevargi (Sixth), and Sorapur which is in the last in the rank ration

(seven). In the worker side again Sedam taluka is the first rank in earning the income from

quarry activity followed by Shahpur, Chitapur, Gulbarga, Chincholli, Jevragi and Sorapur. But

Sorapur taluka has the last rank.

In all talukas total average income of the owner is Rs.30,51,267 and workers average

income is Rs.2,71,402.
 Diagram 6.11: Average Annual income of quarry owners and workers
(Amount in Rupees)

7000000

6000000

5000000
Income (in Rs.)

4000000

3000000

2000000

1000000

0
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli

Talukas

Owner income Workers income

Diagram 6.11 gives comparative position of the average annual income earned by quarry

owner and worker. The diagram indicates very high income earned by quarry owner and worker,

The diagram indicates very high income earned by owners especially in Sedam and Chitapur. It

also shows that the income earned by the owner does not follow a particular pattern, it has high

heals and varies with Sorapur enjoying lowest income. On the other hand, the workers income

indicates a horizontal uniform trend in all seven talukas with increased scale of output, as

workers to get higher and higher income whereas the increasing scale has no reveals to workers.
6.4 Allied Issues:

The quarry work in different talukas of the Gulbarga district depends upon weather

condition. Normally in rainy season work will be stopped. Sometimes, it may take a month or so

after the rainy season to ensure that area is fit for commencing quarry work. As such the working

months are not uniform throughout the year for the entire district. There are also occasions where

work is stopped to meet the social and cultural obligations of the workers like festivals,

marriages, religious fares, pilgrimages etc.

Table 6.4: The distribution of working months in the seven talukas of

Gulbarga district

Talukas
Period Total
Jev Shah Sora Gulb Chita Sed Chinch

6 months 14 06 04 07 07 06 02 46

8 months 08 02 01 Nil 12 16 01 40

10 months 01 Nil Nil Nil 08 05 Nil 14

Total 23 08 05 07 27 27 03 100

Source: Field investigation (July-August 2010)

Table 6.4 shows that, 46% of the respondents opined that the work in the pit is only for six

months, whereas 40% of the respondents opined that the work in the pit is only for eight months

but 14% respondents opined that they work up to ten months. Again work up to ten months is

found only in Sedam and Citapur talukas.

An enquiry was also made from the worker respondents as to why they have taken up

quarrying work. 50% of them opined that quarry work yielded higher income. 38% of them were
of the opinion that quarry work give more employment, 2% of them thought that there were no

alternative jobs. The table 6.5 gives about these details.

Table 6.5: Reason for undertaking quarrying work in the seven talukas of

Gulbarga district

Talukas
Reasons Total
Jev Shah Sora Gulb Chita Sed Chinch

More income 9 06 No 05 18 12 No 50

Employment 13 No 04 02 05 12 02 38

No alternative - No 01 No 01 No No 02

Other 1 02 No No 03 03 01 10

Total 23 08 05 07 27 27 03 100

Source: Field investigation (July-August 2010)

A very important issue connected with quarry work is the exhaustibility of the resource

with growing standard of living and growing aspirations of the people to reach higher and higher

standard of living. The natural resources are in the danger of rapid exhaustion. Hence, thinking

all over the world is going on, about the optimum use of both exhaustible and inexhaustible

resources. The resource exploited in quarry is a natural resource and is exhaustible. It may take

millions of years for rock formation. Since the work in the quarry is going on for more than

hundred of years, a question was put to the workers, as to whether they were aware of the

exhaustibility of quarry resource. The following table gives the opinion of all the respondents.
 Table 6.6: Awareness of the workers about the exhaustibility of quarry

resources

Talukas
Awareness Total
Jev Shah Sora Gulb Chita Sed Chinch

YES 13 01 03 01 11 12 02 43

NO 07 06 01 06 12 10 01 43

Don’t Know 03 01 01 Nil 04 05 Nil 14

Total 23 08 05 07 27 27 03 100

Source: Field investigation (July-August 2010)

From the table 6.6 it is clear that quarry workers as a whole do not seem to have clear

picture about the future of the quarry resources. 43% of the respondents expressed a fear of

exhaustibility of the resource. An equal percentage of the respondents gave the opposite view.

The impression one gathers is take four to five centuries to get completely exhausted, new pits

would be taken up. Thus they are complacent about exhaustibility of quarry resources.

An allied problem (issue) is the environmental impact of quarry work. Quarrying work

does not go very deep into the earth, like mining. Hence it does not produce any dangerous and

toxic gases, and not blasting is undertaking here. Therefore, environment is not very much

affected here by quarrying work. Moreover, there is no urban settlement around the quarries

except the workers engaged in quarry work. Hence, most of the workers (90% ) informed that,
there were no environmental problems in this industry. Their opinions are recorded and given in

the table 6.7.

Table 6.7: Environmental Problems: Opinions of Respondents

Talukas
Opinions Total
Jev Shah Sora Gulb Chita Sed Chinch

YES No 01 No 01 04 03 No 09

NO 23 07 06 06 23 24 03 91

Total 23 08 07 07 27 27 03 100

Source: Field investigation (July-August 2010)

From the foregoing analysis, considering the whole picture of quarrying both from the

point of view of owners and workers, it can safely be concluded that quarry work is quite

remunerative. The economics of it suggest that it offers nearly 300 days of employment and

offers adequate income to both owners and workers to lead a reasonably good standard of living.

This is contrary to the impression one gets if one visits the villages where quarrying activity is

going on or speaks to the population engaged in it. They appear to be very poor and their socio-

economic conditions continue to be low.

The analysis has shown that the average earnings of owners amount to Rs.42,96,326 per

year, while the average earnings of workers are Rs.4,46,614 per year which are far above the

poverty level, based on the income as visualized by the government. The truth of the matter is

that much of their income earned is spent on Liquor. Even women are addicted to it. There is
need for social educators who can persuade them to give up drinking and divert their income

towards improving the standard of their living. Better houses, better living, more education,

better health aare not beyond their reach if properly they are educated/convinced and controlled.

The foregoing analysis has tried to dispel the comman belief that quarry workers are

poor because quarry work is not remunerative and do not support our Hypothesis. H3 and H4

framed at the beginning. Hence both the Hypothesis, i.e. H3: “The workers employed in

quarrying activity do not earn sufficient income to lead a decent standard of living” and H4:

“The workers engaged in quarrying activity are exploited by the owners” are not established in

our study. Hence the Hypotheses, H3 and H4 are rejected.

In addition the fact that the workers are getting sufficient income in proportion to their

work and also are not exploited by the owners, from which they can lead good life. But their

income is not properly used, as a result of which they are remained poor and their socio-

economic life conditions are critical. But at present there is a silver lining in the dark cloud

indicating that gradually they are realizing the importance of education as an investment. They

are sending their children to schools for receiving more education. The investment in education

may serve s substitute for the gradually natural resource on which the present generation is

seeking out its living.

Chapter- VII

CONCLUSIONS AND SUGGESTIONS

 The foregoing analysis has highlighted a number of major findings on the basis of which

the following are the brief summary and major conclusions drawn for the purpose of suitable

policy measure viz.

1. Interest in sustainable development and conservation of resources is of recent development.

Earlier development theory emphasized exploitation of resources for the welfare of the people

rather than their conservation. It followed consumption approach. During the seventy’s of last

century, the MIT scientists threatened the world of “dooms day” within next 150 years, if

suitable steps are not taken to alter the present high life style, requiring high rate of exploitation

of resources causing their complete exhaustion in the very not the distant future. Later

researchers dispelled the Malthusian fear of “dooms day” Nevertheless, the researchers

emphasized the need for conservation of natural resources and sustainable development to

maintain optimum balance between the present and future.

2. Economic development can not be imagined in the absence of natural resources. The quantity

and quality of natural resources coupled with technology, ultimately determine the state and

extent of development in any country. Natural resources are of two categories viz., a) the

renewable resources, which do not pose a serious problem, and (b) the Exhaustible resources,

which are non renewable resources. They have to be optimally used keeping in mind their inter-

temporal equity and availability. The unequal distribution of world resources among the

countries of the world, compels each country to take measures for optimum utilization of

resources available within the country. Incidentally, it may be noted that even the renewable

resources also pose a serious problems, if the rate of exploitation of such resources exceeds the

rate of their replenishment.

3. The general rule for optimization of resources is the equation of marginal revenue and

marginal cost and while applying this rule some differences between the case of reproducible

goods and irreproducible goods are to be noted. Time factor is important in the case of

exhaustible resource. The satisfaction of three following conditions is necessary for optimum

utilization of an exhaustible resources viz.: i) Price = MC + Rent, ii) Price today= discounted

price of tomorrow and iii) Extraction today + Extraction tomorrow= Total stock of the resource.

The theories of Grey and Hotelling, have applied these conditions in the case of an individual

producer and the industry and have arrived at the same conclusion. The optimum rules have been

applied under the different market structures, notably perfect competition and monopoly. Their

implications have been examined under different situations viz, with certainty and with

uncertainty. The analysis of optimal utilization under different market shows that monopoly is

the friend of conservation. Under perfect competition there is reckless exploitation of the

resources leading to fast depletion. Under monopoly, there is slow rate of exploitation and slow

rate of depletion of resources.

The empirical investigation suggests that quarrying activity is carried on, on competitive

basis still there is no fear of its earlier exhaustion. The responses from the owners and workers

reveal that what has been used in the last 100 years or so is just the tip of the ice burg’. Many of

them feel the quarry resources will not be exhausted even in the next five to six years. There is

no necessity of its control through public monopoly. The government however can charge

appropriate royalt taking into account the profit earned by the owners and a fund can be created

out of this profit that could be used for improving the living conditions of quarry workers.

4. Gulbrga district in Karnataka State is the biggest district in area among the 27 districts of

Karnataka. It is socio-economically backward district. It consist of ten talukas viz.,

Afzalpur, Aland, Chincholi, Chitapur, Gulbarga, Jevargi, Sedam, Shahpur, Sorapur and

Yadgiri. According to the 2001 census the total population of Gulbarga district is

A total of 200 quarry establishments spread over seven talukas ofGulbarga district

has been selected for study. Since quarrying is heavily concentrated in Sedam, Chitapur

and Jevargi talukas, nearly 75% of the respondents are drawn from these three taluka. In

each talukas those villages were quarrying activity is predominant are selected. Thus the

respondents are chosen from 39 villages spread over seven talukas.

Quarry exhibits a variety of relations among quarry establishments. In some, such

relations are akin to agriculture. Quarry owner and worker share the activity of

exploitation, digging and marketing and finally share the profit. On the other hand the

owner of the pit either individually or on partnership basis takes the responsibility of

quarrying activity viz., digging, shaping, marketing etc. by hiring workers on wage basis.

Quarrying activity has expanded beyond the owned lands to cope up with increased

demand. Entrepreneurs have taken government land on lease or paying royalty and in

some cases three or four partners together have taken land on lease.

During the last quarter of a century, the government is striving hard to improve

the conditions of the poor and weaker sections of the society. Almost all people engaged

in quarrying are backward. Among the 100 owner respondents 51 respondents belongs to

forward caste, 21 owners belong to scheduled caste. 10 belong to scheduled tribes and 18

owners belong to other backward classes. It mean more than 50% of quarry owners are

from forward class. Whereas quarry workers respondents among 100, only 11

respondents are from forward class and 89 workers are from low caste with regard to

educational status, 22% of the quarry owners are completely illiterate. The development
 programmes in education of government even after five decades have not reached them.

Against this the educational status of the workers is worst. 2/3 of the quarry workers are

completely illiterate.

Quarrying activity in Gulbarga district has exhibited two types of relations

between the owner of the pit and workers engaged in it, namely i) factory type and ii)

Agricultural type. In the first case the owner bear all the expenses and workers receive

only wages for the work done, whereas in other case both the owner share the expenses

according to agreed proportions and market the output jointly and share the profit. Of the

seven talukas, only in two talukas viz., Jevargi and Sorapur, agriculture tenancy type

prevails and in other 5 talukas factory type is found.

5. The output of quarry in Gulbarga consists of Katagal, Grapepole, Hyder, Parcy, Bandi,

Chavani and Khadi. The output has market not only within the district and withi the state

but also outside the state. In Gulbarga district, the primary investigation reveals that 200

respondents having totally 1080 pits are busy in producing quarry output spread over an

area of 1192 acres. Of the total 200 respondents spread over 39 villages in seven talukas

of the district, 100 are owners and others are workers.

The analysis of various types of physical output of quarry indicates the Katagals

which are used for construction of building, basement of building etc. are not uniform

size. Grapepoles which are used in grape farming as pillers for erecting mantapa, are

having 9 to 10 ft. in length. The stone bricks of different sizes varying between 1 and 2 ft,

called Hyder, are used for corners in the walls of the houses, which makes the wall very

strong. For flooring Parcy stones are supplied by quarry, in different in sizes and forms

varying from 1X1, 2X2 and 2X4 feet etc. But Bandi are crude type of parcies, longer,
wider and thicker, than parcies, which have normal size of 6X2 and bigger size 8X6 feet,

Where as Chavani is the type of Parcy stone, used over door and window frames. Part of

the stone protrudes outside, and serves as wind and rain screen (weather board) and

whatever remains at the end in the quarry is supplied as Khadi for road construction and

other concrete purposes.

Further, in chapter five the talukaswise physical output is examined and analysed

from the owner side. It is as follows:

a)Jevargi is the only taluka where Grape poles are produced. Its highest output is of Parcy

(6768000 sq.ft.) followed by the Katagal (4158600 in number) and Bandi (4221500

sq.ft.) In Jevargi 22 samples from 5 villages were examined.

b) In Shahpur 14 samples from 4 villages were taken. The production there indicates

highest output of Parcy (13860000 sq.ft.)

c) Sorapur is a small taluka with insignificant quarry output. Four respondents from three

villages are analyzed. The output of all items is small here. However, among them

Katagal is leading with 3,10,000 in numbers. Sorapur is known for production of Chavani

stones used over the door, window frames. On an average 36000 Chavani stones are put-

up for sale in this taluka every year.

d) Gulbarga taluk though with district head-quarter has little scope for quarrying activity.

Still parcy (8240000 sq.ft.) and Bandi (426800 sq.ft.) are the major output.

e) Chitapur is highly concentrated with quarry output. It supplies raw materials to the

cement industry also. It is the highest producer of Parcy ( 46160000 sq.ft.) next only to

Sedam. Since quarrying is concentrated here the study has major representation from his

taluka i.e. 25 samples from 11 villages.

 f) Sedam and chitapur together have lions share in the quarry output. Sedam is leading

with ( 46000000) of Parcy and with (3022000) of Bandi.

g) Chincholli like Shahpur and Sorapur is a small producer of output.

h) The district scenario indicates that Parcy, Bandi, Katagal and Hyder are the major

outputs of the district. Among them parcy is leading with district average of ( 136860800

sq.ft.) followed bt Bandi (1,28,30,480 sq.ft.)

6. The income of the owners of quarry pits is derived from the sale of quarry output. From

the study, the average prices of different quarry output are found as follows:

o Katagal: This is a small brick type stone, used in building. Its price ranging from

Rs.350 to 400 per tractor load and Rs. 800 to Rs. 900 per truck load, which works

out to be 2 to 4 rupees per piece.

o Grapepole: These are the poles used to support grape creepers and also to fence

the grape yard. These poles vary from 6 to 10 ft. in length. Their prices vary from

24 to 30 rupees each depending upon the size. The average price is usually 27

rupees per pole.

o Hyder: These are the cut stones used in building. These are used as corner stones.

The normal size of a Hyder is 2X1X4(2/3cft.) It is sold for 8 to 10 rupees per

stone. An average sized building would require 100 pieces of Hyder for

construction.

o Parcy: This is a flat stone used for flooring. Each stone is of the size of 2X2 with

thickness varying from 1” to 2”. It is sold at 14 to 20 rupees per piece depending upon
 the thickness, colour, and quality of the pieces. Parcy is the output of quarry which is

much is demand. Major income of the quarry is from sale of Parcy only.

o Bandi: These are the crude type of parcies, which are longer, wider and thicker than

parcies. Their normal size is 6’X2 with 3” (1/4-3 cft) Each piece is sold for 50 rupees,

bigger ones with 8’ in length are sold for 80 rupees per piece.

o Chavani: Chavani is a Parcy type of stone used over the door and window frames,

with part of stone protrudes outside, and serves as a wind and rain screen. Its price

varies from 15 to 20 rupees per piece.

Regarding the income of the owners of the pit, it is from the investigation

found out taluka wise as follows:

a) Jevargi: Income from Parcy is highest Rs. 10180000 followed by income from Bandi

7068000 rupees and Katagal 5380600 Rupees respectively. These two together yield most of

their income. The sale of Grapepole yielded about 1730300 rupees per year and the average

income to the owner of a pit works out to be 1287356 rupees.

b) Shahpur: Income from Parcy and Bandi bring maximum income to the owner. They are

33345000 rupees from parcy and 7664000 rupees from Bandi respectively. Khadi income is

insignificant compared to others. It is only 10000 rupees. The average income is Rs.2672735.

c) Sorapur: Chavani stones and Parcy are the two important sources of income. Together they

yield substantial income. Chavani stones are popular especially in Sorapur. However income

from them is only 45300 rupees. While the income from Katagal is Rs.620000. The average

income to the owner in sorapur taluka works out to be 210080. This is one of the lowest income

in Gulbarga district.
 d) Gulbarga: It is also following same pattern with Parcy and Bandi as major income

earners. Parcy fetches 2,10,20,000 rupees and Bandi 11,28,350 rupees. It is found that the

average income here is 32,42,486 rupees.

e) Chitapur: It is at the top level of the list. Grapepole and Chavanis are not found here.

Income from the sale of Parcy is highest with Rs.13,82,20,000. The income from Hyder was the

lowest here. The average income to the owner was calculated at Rs.56,68,196.

f) Sedam: It is leading taluk from the point of view of earning of the owners. Income from

Parcy was Rs14,68,32,000 and from Bandi Rs.90,77,600. The average income here was

Rs.62,62,326.

g) Chincholli has average income to the owners at rupees 20,15,695. However major income

was from the sale of Parcy.

h) The district income to the quarry owners (100 samples) works out to be 8,86,600 rupees

but there are wide variations in the average among the talukas at the top Chitapur and Sedam

have Rs.62 to 76 lakh per owner and at the lowest wrung of the ladder, the owner get 3,60,000 in

Sorapur.

In order to ascertain the net income position of the owner, we enquired the expenditure

pattern of the owners. The main items of expenditure are the following: Wage, Rent, Agency

expenditure etc.

The entire expenditure is split into two categories viz.

a) Fixed expenditures consisting of government fees, salary, royalty, rent, manager’s salary etc.

b) Variable expenditure covering wages paid to the workers, transport expenditure and other

incidental expenditures connected with output. The expenditure pattern across the seven talukas

of the district is not uniform. The fixed expenditure is as low as 19.61% of the total income in
Chincholli. But it Shoots up to as high as 31.69% in Jevargi. However, the average expenditure

works out to be 26.79%. As against this variable expenditure is lowest in Chitapur with 29.21%

of the income and it is highest in Shahpur with 43.44% of the income. The average works out to

be 26.79%. As against this variable expenditure is lowest in Chitapur with 29.21% of the income

and it is highest in Shahpur with 43.44% of the income. The average figure here is 34.94% of the

income. The fixed and variable expenditure together constitute around 62% of the income

leaving a clear margin of profit 38% of the income. The talukawise analysis shows highest

percentage of profit to Chincholli owners and lowest to Jevargi owners. The highest percentage

of profit in Chincholli is due to the very low fixed expenditure while in Jevargi both fixed fixed

as well as variable expenditure record higher percentage of income and hence the profit margin

is reduced here. It is interesting to note that in Chitapur and Sedam both fixed and variable

expenditure are close to their heels. Thus these two talukas enjoy higher margin of profit of 45%

and about 41% respectively. In terms of the average profit to the owners of the 7 talukas can be

arranged in descending order Chincholi 49.74%, Chitapur 44.34%, Sorapur 42.87%, Sedam

40.80%, Gulbarga 34.74%, Shahpur 28.38%, Jevargi 25.92%.

7. Gulbarga district is still one of the backward districts of the state, and suffers from the lack of

infrastructure facilities. This causes the variable expenditures to shoot up in some talukas

resulting in low profit.

Most of the quarry output is sold at the pits only. Hence the prices of quarry output are

considerably low because the buyers do take into account the cost of transport as the quarry

output is not a weight loosing material. Another reason for low price is the prior contract entered

into between the buyer and quarry owners on the basis of which the owners collect advances

from the buyers and hence there would be no scope for raising the price.
8. Usually, the demand for quarry output is a local demand from builders and contractors. But in

Sedam and Chitapur the demand comes from outside the state especially from Maharashtra and

Andra Pradesh. In Sedam and Chitapur talukas, merchants from other states have set up their

agencies to buy it from the local owners.

Marketing is mainly the responsibility of owners. But in Jevargi both workers and owners

make efforts to sell output. The clientele for quarry output shows that 37.5% of the total sales are

to the consumers, 31.45% are to agents, 16% are contractors, 8% to officers and 7% to engineers.

Classwise distribution of demand indicates 30.20% from upper class, 45.30% from middle class

and 24% from the lower class.

9. An important issue connected with exhaustible resources is the effect of quarrying work on

environment. Nearly 92% of the owners have felt that there is no harmfull effect of quarry work

on environment, even in talukas like Chitapur and Sedam where quarrying is carried on an

extensive scale. Even where quarry raw material is supplied to the cement industry it has not

produced harmful effect over the years.

10. About exhaustibility of a resource, 63% of the owners express fear about exhaustibility, in

view of rapid urbanization and population. However, they did not have any idea about when

resources would be completely exhausted. On the other hand, 37% of the owners were absolutely

free from any such fear and they express that resources would be available even for 500 to 600

hundred years.

11. In the chapter sixth, the problem of quarry issue are discussed from the point of view of the

workers. From the investigation, it is found that the physical output by the workers was relatively

lower than that of the owners. In Jevargi taluka quarry production by workers is biggest in

Katagal followed by Parcy and Bandi, and the output of Khadi is negligible here. In Shahpur,
Parcy is the major output followed by Bandi, Grape poles are not produced here. Coming to

Sorapur, Katagal is the major output. However compare to the earlier two talukas output is quite

low here. But Sorapur is famous for Chavani stones , Which are not produced in other talukas.

Gulbarga taluka has the least output of quarry. However within it parcy production is substantial.

Chitapur again is one of the big producers of quarry output even from workers side.

Workers produce 11065784 sq.ft. of Parcy on an average every year followed by 1541424 sq.ft.

of Bandi per year. Sedam is the highest producer of Parcy with 14146450 sq.ft. per year. Its

output of Bandi 1344856 sq.ft. though very high is second to Chitapur. Chincholi is a small taluk

where except Parcy, (926561 sq.ft.) other quarry ouputs are negligibl. The average physical

output in Gulbarga district is 31826773 sq.ft. of Parcy, 5188148 sq.ft. of Bandi and 2125700

numbers of Katagal. The other outputs are not much.

12. The income of the quarry workers is the wage that he receives from owners for the output he

produces, with the exception of Jevargi and Sorapur. In these two talukas workers share the

income which the owner receives by the sale of quarry output. The workers in these two talukas

share some of the comman expenses like digging, cleaning, clearing of bush etc. In Jevargi taluk

Katagal brings a income of Rs.2036350 in a year by way of share of the workers followed by

Parcy Rs.736200 and Bandi Rs.567000. The average income of the workers here is about

Rs.1,66,589. A clarification is called for here when the workers income is compared with owner

income they are not equal here, for the simple reason that the owner has many pits in which

number of workers are employed. His average income is computed on the basis of half the share

from all the workers together. By implication if workers income is Rs.1,66,589, while the owners

income is Rs.38,31,550, it means twenty three workers are engaged in that particular pit.
 In Shahpur taluk workers are paid piece rate wages. They earn 15,08,600 rupees for

production of Prcy and Rs.9,76,000 for production of Bandi. 8 worker respondents have been

considered for this and the average income of these workers comes to Rs.3,14,070. Sorapur is

again exhibiting a agriculture tenancy type relationship so that income is shared between owner

and worker. The worker is Sorapur gets lowest income i.e. 89,650. Gulbarga taluk strangely

gives highest income to the workers for Parcy and Bandi income. The average annual income per

worker is Rs.3,06,104. Chitapur and Sedam again stand a part from others because of their lions

share. Workers here gets substantial income from Parcy (Rs.81,14,250) and from Bandi

(Rs.11,19,200). The average income here is Rs.3,45,278. As usual Sedam is the leader from the

point of view of workers income too. Parcy and Bandi bring to the workers Rs.86,05,375 and

Rs.12,36,775 respectively. The average income to the workers after taking into account income

from other quarry outputs, works out to be Rs.3,72,511. Chincholi though small talauk but yields

an average income to the workers of the order of Rs.2,05,776. Thus it can be seen that income to

the workers in the entire district, on an average is Rs.2,89,327.

The analysis of income to the workers in all the seven talukas of district reveals that

Sedam and Chitapur are at the top, while Sorapur is at the bottom. In descending order, Sedam

has Rs.3,72,511, Chitapur Rs.3,45,278, Shahapur Rs.3,14,070, Gulbarga Rs.3,06,104, Chincholi

Rs.2,05,776, Jevragi Rs.1,66,589 and Sorapur Rs.36,650. When compared with the owners

income, Shahpur and Gulbarga inter change their positions.

13. The quarry work in different talukas depends upon whether condition. Normally work is

stopped in rainy season a month or two are required for the area to become fit for quarry work.

Since rainfall is not uniform in all talukas it effects the period of quarry work. In addition
workers stop work to attend the social and cultural obligations like marriages, festivals, religious

fairs, piligrimage etc. 46% of the respondents opined that quarry work would last for six months

in a year. Another 40% said that it would go up for six months. Only 14% report that work

would go up to 10 months, of course that would be in Sedam and Chitapur.

14. An enquiry as to why the worker took up quarry work, revealed the facts that 50% of the

workers have taken up quarry work for the reason that it yielded them higher income, while for

38% of the workers, quarry give them more employment and 2% took up quarry work in the

absence of any alternate work.

15.The quarry work is of equal concerned to workers. With exhaustible nature of the resources of

the resources in the quarry, with growing demand for it, due to higher standard of living,

growing population and ever increasing aspirations of the people, the natural resources is in

danger of rapid exhaustion. The workers in this district have given different opinions on these

issues 43% of the workers expressed the fear that the resource would be exhausted very soon. An

equal percentage of the workers (43%) are quite optimistic. They have no fear of exhaustibility

in another 500-600 years. And it is also found that the workers are not properly educated about

the exhaustibility and sustainability of resource.

As regards the environmental impact of quarry work 91% of the workers felt that no

harmful effects were produced either on flora or on fauna by quarry work. As opposed to mining,

quarrying work does not go deep in to the earth as to expose dangerous and toxic gases; hence it

has no environmental damage.

Conclusion in Nutshell:

Quarrying is an important activity in Gulbarga district. It is concerned with exhaustible

resources. Nature has given stone formation over million of years and these are now extracted

and shaped in different forms to meet the consumer requirements. Keeping in view the object set

for the research the study has analysed the nature of quarrying activity in Gulbarga district. It has

analysed the kinds of stone material extracted from earth, and it has examined the types of

relationships that exist between workers and owners in quarrying industry. Two types of

relationship are explained, viz., i) agricultural tenancy type, and ii) Factory type. The study has

amply evidenced that the quarrying industry provides an average employment for about eight

months in a year. The lowest period is six months and highest period is ten months in a year

depending upon the wealth conditions. It is found that the people engaged in quarrying activity

earn substantial income which places them far above the poverty line. The average income of a

pit owner is Rs.48,90,032/- that of a worker employed in it is Rs.2,89,327/-. Both the owners and

workers do not seem to be aware of the exhaustibility of resource. This is because of the fact that

they think that what has been used up in the last 100 years or so just a “ tip of the rice burg”.

They do not seem to think of its exhaustibility even in the next five to six hundred years. The

study also indicated that the people engaged in quarrying activity do not think of any

environmental hazard due to quarrying activity.

The study has helped to accept the first and the second hypothesis (H1 and H2) i.e., it has

established the fact that “ The people engaged in quarrying activity are not aware of the ultimate

impact of exhaustibility of resources on living standard of the people, and it has also proved that

the people engaged in quarrying activity are also proved that the people engaged in quarrying
activity are also not aware of the environmental impact of their activity.” The study has rejected

the third hypothesis (H3) that “ The workers are employed in quarrying activity do not earn

sufficient income to lead a decent standard of living.” It has also rejected the fourth hypothesis

(H4) viz., “ The workers engaged in quarrying activity are exploited by the owners.”

The present study though concerned with exhaustible resources is essentially dealing with

socio-economic conditions of the people engaged in exploiting exhaustible resource. The people

employed in this industry are mostly belonged to scheduled caste and scheduled tribes. This is an

useful study for the government which is striving the best to ameliorate, the economic and social

conditions of the backward communities. It has a policy implications because the quarrying

activity can become an important antipoverty programme with substantial income and

expenditure in quarrying industry has revealed starling results contrary to the general belief. The

industry provides very high income to the owners and reasonably high income to the workers

too. However, these are concealed because of apparently poor type of living style found in these

communities. The truth of the matter is that due to illiteracy and the strenuous nature of work,

much of their income is “spent on drinking”. Even women labourers are also addicted to it. The

evils of drinking are well known to all. They affect family life, economic well being and

prospects of the children coming up. Hence there is need for attention of social welfare officers

and social workers who can pursue these workers to divert their earnings towards the

improvement of their living conditions and the standard of living. Since the quarry industry is

concerned with exhaustible resources, it can not be relied upon as a major source of income in

the years to come. This has been as suggested in the R.M. Solow’s article referred to in the

first chapter, the earnings of the quarry industry should be diverted towards the investments, so

that these will serve as substitute for the exhaustibility of resources.

Suggestions:

Keeping in view the foregoing analytical frame, and major findings, there are certain

measures which may be taken into consideration while making efforts to solve the problems of

quarrying industry and to help the quarry workers in Karnataka.

There are many possibilities of improvements which help the quarry workers. As it is

found, now, that polishing of the stone is not normally done by the workers. If this is under taken

by the worker by some mechanical equipment and through training, it would increase the share

of producers in the final rupee paid by the user. There are possibilities of employing machines in

digging work. With mechanization it would reduce the strain of the workers. Generally, once the

pit is exhausted it is abandoned as unfit for any use. It can be filled in by thin layer of soil which

would enable floriculture and raising of light crops, even on the face of uncertain rainfall. There

is scope for raising revenue to the state by revising the royalty fees, rent etc. A ‘workers welfare

fund’ can be created out of the revenues collected from quarrying and the same can be used by

providing better housing, medical facility and proper education to the children of the workers

need not to be considered as backward socio-economically in the next generation.

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Levhari, D. and Robert.S. Pindyck.(1981): “The Pricing of Durable Exhaustible

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ECONOMCS OF EXHAUSTIBLE RESOURCES; A CASE STUDY OF QUARRYING IN

GULBARGA DISTRICT

SCHEDULE FOR OWNER

1. Name of the Quarry owner:

Place:

Taluk:

District:

Education, Illiterate, Primary, Higher Primary, High School, College, Technical

Course.
2. Total area of the Quarry work_______________________

Year of starting the quarry work_________________

Number of pits working at present_______________

Expected life of the quarry in the area____________

3. Type of Ownership

a) Sole Owner

b) Partnership
4. About the Quarry land

1. Own land

2. Government land

3. Rented land

4. Partnership

5. Agreement for Quarry work with Quarry worker

1.

2.

3.

4.

5.

6. Total Production of Quarry stones in a year:

Types of Product Production (Output) (in number & sq.ft)

Katagal
Grape pole

Hyder
Parcy
Bandi

Chavani
Khadi
Others

7. Total income of Quarry product in rupees

 Types of Product Price rate Income
Katagal
Grape pole

Hyder
Parcy
Bandi

Chavani
Khadi
Others

8.Total Production of Quarry Output for 5 years:

Katagal Grapepole(in Hyder(in Parcy(in Bandi(in Chavani(in Khadi(in Others Total

Year (in No.) No.) No.) sq.ft..) sq.ft.) No.) trip)

2005-06

2006-07

2007-08

2008-09

2009-10

9. Price of foods for 5 years:

Katagal Grapepole(in Hyder(in Parcy(in Bandi(in Chavani(in Khadi(in Others Total
Year (in No.) No.) No.) sq.ft..) sq.ft.) No.) trip)

2005-06

2006-07

2007-08

2008-09
2009-10

10. Income from the sale of the goods for five year (in Rs.):
Katagal Grapepole(in Hyder(in Parcy(in Bandi(in Chavani(in Khadi(in Others Total
Year (in No.) No.) No.) sq.ft..) sq.ft.) No.) trip)

2005-06

2006-07

2007-08

2008-09

2009-10

11. Total income for the year:

12. Current Expenditure for the year:

13. Fixed Expenditure for the year:

14. Government fees for the year:

15. Other Expediture for the year:

16. Net Profit for the year:

17. Period of Quarry work in a year:

a) Six month

b) Eight month

c) Ten month

d) Twelve month

18. Purchasers:

a) Consumers

b) Business men

19. Consumers: I) Local II) Other district III) Other state

Business Men I) Local II) Other district III) Other state

20. Problems in Marketing of quarry goods:

Yes/No

21.If yes which are those,

a) Transport problem

b) Marketing problem

c) Others

22. Competition among quarry owners in

a) Selling of quarry goods

b) Getting workers for quarry work

23. Use of Machine in quarry work:

Yes / No.

If Yes, indicate______________

a) Own Machine

b) Rented Machine

24. Cost of using machines-borne by owner/worker:

25. Responsibility of selling the goods:

a) Owner

b) Worker

c) Both

26. Loss in quarry borne by :

a) Owner

b) Worker

c) Both
27. Quarry expenditure is increasing year to year?

Yes/No,

If Yes, how much?

28. Consumer specification of goods:

Yes/No

29. If Yes, attempts to meet them:

30. Demand for Quarry product:

a) Consumers

b) Officers

c) Middlemen

d) Engineers

e) Contractors

f) Others

31. Class to which purchasers belong:

a) Higher class

b) Middle class

c) Low class

32. Quarry workers (partner)’s base of working:

a) Fix worker

b) Frequently change

c) Depend upon mutual understanding

d) In every pit they change

33. Use of land after completing the quarry work:

34. Any bad effect on Environment by quarry industry:

35. You have any knowledge of Exhaustibility:

Yes/No

Researches Notes:

Date:

Time: Signature of Researcher

ECONOMCS OF EXHAUSTIBLE RESOURCES; A CASE STUDY OF QUARRYING IN

GULBARGA DISTRICT

SCHEDULE

FOR WORKER/PARTNER

1. Name of the Quarry owner:

 Place:

Taluk:

District:

2. Local/Migrated:

3. Number of family member (in No’s):

Male: Female: Total:

Adults: Children: Total:

4. Caste:

5. Education: Illiterate, Primary, Higher Primary, High School, College, Technical

Course.
6. Main work/Sub work:

7. Month in which quarry work started _______________

8. Month in which work is stopped:

9. Time taken for completing the pit (in month)___________

10. From how many years, you are working in the quarry?

11. a) Average daily wise workers in a year_________

b) What is wage__________________

c) Total days of wage _____________

d) Total wage rate ________________

e) Expenditure of quarry workers___________

12. Production and income of the quarry in one year:

Types of Product Production Income (in rupees)

Katagal
Grape pole
Hyder
Parcy
Bandi

Chavani
Khadi
Others

13. Net profits for quarry workers in a year ___________

14. Production of goods for 5 years (2005-2010)

Katagal Grapepole(in Hyder(in Parcy(in Bandi(in Chavani(in Khadi(in Others Total

Year (in No.) No.) No.) sq.ft..) sq.ft.) No.) trip)

2005-06

2006-07

2007-08

2008-09

2009-10

15. Price of quarry goods for 5 years (2005-2010)

Katagal Grapepole(in Hyder(in Parcy(in Bandi(in Chavani(in Khadi(in Others Total

Year (in No.) No.) No.) sq.ft..) sq.ft.) No.) trip)

2005-06

2006-07

2007-08

2008-09

2009-10

16. Income of the quarry goods for 5 years (2005-2010)

 Katagal Grapepole(in Hyder(in Parcy(in Bandi(in Chavani(in Khadi(in Others Total
Year (in No.) No.) No.) sq.ft..) sq.ft.) No.) trip)

2005-06

2006-07

2007-08

2008-09

2009-10

17. Period of working months in a year:

a) Six months

b) Eight months

c) Ten months

d) Twelve months

18. Sale of quarry products:

a) At the place of production

b) Particular market place

c) Contract base market

d) others

19. Who are the purchasers?

a) Consumers

b) Middleman

c) Whether consumer is Local____________ within district_____________

State___________ Other State______________

c) Middleman consumer is Local____________ within district_____________

State___________ Other State______________

20. Any difference between price of quarry product between local market and city market,

a) Yes/No

b) If yes, more/less

c) If more how much in %age

d) If less how much in %age

21. Why have you taken up quarry work?

a) More income

b) Employment opportunity

c) No other work

d) If others

22. Do you know quarry stone is an exhaustible resource and one or other day will exhaust,?

What is your opinion?

23. Any bad effect on environment from quarry work.

24. When you joined the quarry work, what are the contract agreement with owner.

1.

2.

3.

4.

5.

Researcher notes:

Date:

Time: Signature of Researcher

Parcy Polishing Unit, Shahabad. (Chitapur)
Digging and Open the New pit.
A view of Pit in rainy season
New pit area
Percy (Bandi) cutting machine

Hyder loaded tractor

Waste land (quarry exhausted area)
Waste Land after Quarrying.(Nagarhalli L.T.)

Pit Digging Machine (Buldozer)

Parcy Cutting by Cutting Machine, Shahabad
 Parcies are Ready for Sale, Batagera in Sedam taluk.

Parcies are Ready for Sale, Ranjol village in Sedam taluk

Water Pulling Machine.
Waste Parcies (marked Yellow line)

Dumping the waste

Quarry Workers
Labours are loading the percies to larry