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)


ECONOMICS OF EXHAUSTIBLE RESOURCES ECONOMICS OF EXHAUSTIBLE RESOURCES ECONOMICS OF EXHAUSTIBLE RESOURCES ECONOMICS OF EXHAUSTIBLE RESOURCES- -- - A CASE STUDY OF A CASE STUDY OF A CASE STUDY OF A CASE STUDY OF
QUARRYIN QUARRYIN QUARRYIN QUARRYING INDUSTRY IN GULBARGA DISTRICT G INDUSTRY IN GULBARGA DISTRICT G INDUSTRY IN GULBARGA DISTRICT G INDUSTRY IN GULBARGA DISTRICT


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 20
th
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 50s 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 Samuelson
1
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 50s
and 60s 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 seventys 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.
Slow
5
. 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-Douglass type.
Y=e
ct
L
g
. D
h
. K
1-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 e
ct
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 e
ct
+ 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 informations 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. Mill
3
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 Millss 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 mans 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 19
th
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 peoples 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 Marshals 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 Marshalls 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 earths
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 countrys 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. As value increases by 5% every year,
while Bs 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 GRAYS 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 Grays theory.
3.5 Hotellings 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 Grays cost assumption.
The crucial distinction between Hotellings model and Grays 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 Hotellings 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 76
0
and 04
minutes east and 77
0
and 42
0
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 1
st
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 1
st
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 1
st

and chitapur follows as second, while Afzalpur occupies bottom most, that is the 10
th

place. The population of Gulbarga taluk alone which is ____________ accounts for
______ of the total population. Sedam and Afzalpur hold 9
th
and the 10
th
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, Fullers 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
Talukas
Jevargi Shahpur Surapur Gulbarga Chitapur Sedam Chincholi Total
Number of
respondent
22 11 5 7 26 26 3 100

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
Type of
Ownership
Talukas
Total
Jevargi Shahpur Surapur Gulbarga Chitapur Sedam Chincholi
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
Castes
Talukas
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
Castes
Talukas
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
Primary
2 2 NIL 2 3 3 1 13
Secondary 1 1 1 Nil 2 2 Nil 07
College 3 Nil Nil 1 3 3 Nil 10
Technical
Course
Nil Nil Nil Nil Nil Nil Nil Nil
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
Status
Talukas
Total
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
Primary
01 Nil Nil Nil 01 01 Nil 03
Secondary Nil Nil Nil Nil 01 01 Nil 02
College 01 Nil Nil Nil Nil Nil Nil 01
Technical
Course
Nil Nil Nil Nil Nil Nil Nil Nil
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 Acres
Talukas Jevargi Shahpur Sorapur Gulabarga Chitapur Sedam Chincholi Totol
Quarry land
in acres
136 46 11 26 247 351 18 835
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
the
Talukas
Type of Quarry Output
Katagal (in
No.)
Grapepole(in
No.)
Hyder(in
No.)
Parcy(in
sq.ft..)
Bandi(in
sq.ft.)
Chavani(in
No.)
Khadi(truck)
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
owners talukawise in Gulbarga district.
Diagram 5.1 showing the average physical output of quarries during the period 2005-2010


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
Katagal (in no.)
3550200
120100
200000
5000
400100
519400
2000
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
p
h
y
s
i
c
a
l

o
u
t
p
u
t

(
i
n

n
o
.
)


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.







Hyder
200100
46200
4600 1100
7000
500600
2220
0
100000
200000
300000
400000
500000
600000
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli
Name of Talukas
P
h
y
s
i
c
a
l

o
u
t
p
u
t

(
i
n

n
o
.
)

Diagram 5.3 showing the average physical output of quarries during the period 2005-2010

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
Parcy (in sq.ft.)
5560000
8087000
11400
7240000
46160000 46000000
1280000
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
45000000
50000000
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli
Name of Talukas
P
h
y
s
i
c
a
l

o
u
t
p
u
t
(
i
n

s
q
.
f
t
.
)

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
Bandi(in sq.ft.)
3320500
4123500
2930
400000
800000
3022000
17600
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
p
h
y
s
i
c
a
l

o
u
t
p
u
t

(
i
n

s
q
.
f
t
.
)



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:
Khadi
500
1100
6400
9200
240
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Jevergi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
P
h
y
s
i
c
a
l

o
u
t
p
u
t

(
i
n

t
r
i
p
s
)
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 6X2 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
the
Talukas

Types of Quarry output
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


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
Katagal
5380600
272400
620000
7,000
680800 688600
2,500
0
1000000
2000000
3000000
4000000
5000000
6000000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n

R
s
.
)
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

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.



Hyder
710200
182000
19000 6000
30000
2206400
10000
0
500000
1000000
1500000
2000000
2500000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
i
n
c
o
m
e

(
i
n

R
s
.
)







Diagram 5.8 showing the average income of quarries during the period 2005-2010

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,
Parcy
10180000
33345000
25000
21020000
138220000
146832000
4200000
0
20000000
40000000
60000000
80000000
100000000
120000000
140000000
160000000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n

R
s
.
)
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


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
Bandi
7068000
7664000
6830
1128350
2082450
9077600
50200
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
9000000
10000000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n

R
s
.
)
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


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.
Khadi
35300
10000
40650
25600
312000
8920
0
50000
100000
150000
200000
250000
300000
350000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n

R
s
.
)











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)
Items Jevargi Shahpur
Sorapu
r
Gulbarga Chitapur Sedam
Chinchol
li
Income 2510440
0
4147340
0
71613
0
2220200
0
14103885
0
15911660
0
427162
0
Fixed
Expenditur
e
7782364


1202728
6


14322
6

7104640 36670101 46143814 854324
Variable
Expenditur
e
1054384
8
1824829
6
24348
4
7548680 42311655 47734980
128148
6
Profit
6778188
1119781
8
32942
0
7548680 62057094 65237806
213581
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)

Particulars
Talukas
Jevargi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli Total
Transport
Problem
8 04 02 01 05 03 1 24
No
problem
03 03 Nil 03 07 10 Nil 26
Total 11 07 02 04 12 13 01 50
Source: Field Investigation (July to August 2010.)


Table: Marketing effort by owners and workers
Sellers
Talukas
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
Clientele
Talukas
Jev Shah Sor Gul Chit Sedam Chinch Total %
Direct
Consumer
22 14 4 7 22 22 2 93
37.50
Agents 6 14 - 7 23 26 2 78
32.45
Contractors 3 6 - 4 9 16 1 39
16.00
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)
Categories
Talukas
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:

Opinions
Talukas
Jevargi Shahpur Sorapur Gulbarga Chitapur Sedam Chincholli Total
Exhaustible 10 06 01 02 6 6 01 32
Non-
Exhaustible
01 01 01 01 6 7 01 18
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

Particulars
Talukas
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)
Effects
Talukas
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
no.)
Grapepole
(in no.)
Hyder (in
no.)
Parcy (in
sq.ft.)
Bandi(in
sq.ft.)
Chavani
(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


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
Katagal (in no.)
1738000
9400
320600
5200
21525
30150
825
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
2000000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
P
h
y
s
i
c
a
l

o
u
t
p
u
t

(
i
n

N
u
m
b
e
r
s
)

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
Hyder (in no.)
43600
5800
4200
680
7800
33560
1750
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
P
h
y
s
i
c
a
l

O
u
t
p
u
t

(
i
n

N
o
.
)

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
Parcy (in sq.ft.)
872000
2026000
3550
2786428
11065784
14146450
926561
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
P
h
y
s
i
c
a
l

o
u
t
p
u
t

(
i
n

s
q
.
f
t
.
)

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
Bandi(in sq.ft.)
672000
1286000
1860
328350
1541424
1344856
13658
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
P
h
y
s
i
c
a
l

o
u
t
p
u
t

(
i
n

s
q
.
f
t
)


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:
Khadi (truck)
420
260
820
3220
7238
220
0
1000
2000
3000
4000
5000
6000
7000
8000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
P
h
y
s
i
c
a
l

o
u
t
p
u
t

(
i
n

t
r
i
p
s
)
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.

2036350
11700
428000
8,600
21300
36860
980
0
500000
1000000
1500000
2000000
2500000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n

R
s
.
)
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.
0
5000
10000
15000
20000
25000
30000
35000
40000
0
11,700
i
n

c
o
m
e

i
n

R
s

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
less. Sedam Rs.36,860, Chitapur Rs.21,300, Shahpur Rs.11,700, Gulbarga
Rs.8,600 and Chincholli taluka has only Rs.980.
Talukawise income of the workers from Hyder stones in Gulbarga District.
0
8,600
21,300
36,860
980
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
less. Sedam Rs.36,860, Chitapur Rs.21,300, Shahpur Rs.11,700, Gulbarga
Talukawise income of the workers from Hyder stones in Gulbarga District.



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.





96400
12400
9200
4200
16400
68300
3650
0
20000
40000
60000
80000
100000
120000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n

R
s
.
)


6.8 Talukawise income of the workers from Hyder stones in Gulbarga District.


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




736200
1508600
3650
1927500
8114250
8605375
599500
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
9000000
10000000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n

R
s
.
)









6.9 Talukawise income of the workers from Bandi stones in Gulbarga District






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.
567000
976000
2200
190125
1119200
1236775
9600
0
200000
400000
600000
800000
1000000
1200000
1400000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n

R
s
.
)













6.10 Talukawise income of the workers from Khadi stones in Gulbarga District




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
7200
3860
0
12300
51350
110510
3600
0
20000
40000
60000
80000
100000
120000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n

R
s
.
)
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)

Talukas
Owner income
(Rank)
Workers income
(Rank)
Workers income as
a % of owners
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)






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.

0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
Jevargi Shahapur Sorapur Gulbarga Chitapur Sedam Chincholli
Talukas
I
n
c
o
m
e

(
i
n


R
s
.
)
Owner income Workers income

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
Period
Talukas
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
Reasons
Talukas
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
Awareness
Talukas
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
Dont 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
Opinions
Talukas
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 seventys 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 6X2 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, managers 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. Solows 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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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:

Year
Katagal
(in No.)
Grapepole(in
No.)
Hyder(in
No.)
Parcy(in
sq.ft..)
Bandi(in
sq.ft.)
Chavani(in
No.)
Khadi(in
trip)
Others Total
2005-06

2006-07

2007-08

2008-09

2009-10


9. Price of foods for 5 years:
Year
Katagal
(in No.)
Grapepole(in
No.)
Hyder(in
No.)
Parcy(in
sq.ft..)
Bandi(in
sq.ft.)
Chavani(in
No.)
Khadi(in
trip)
Others Total
2005-06

2006-07

2007-08

2008-09

2009-10


10. Income from the sale of the goods for five year (in Rs.):
Year
Katagal
(in No.)
Grapepole(in
No.)
Hyder(in
No.)
Parcy(in
sq.ft..)
Bandi(in
sq.ft.)
Chavani(in
No.)
Khadi(in
trip)
Others Total
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 Nos):
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)
Year
Katagal
(in No.)
Grapepole(in
No.)
Hyder(in
No.)
Parcy(in
sq.ft..)
Bandi(in
sq.ft.)
Chavani(in
No.)
Khadi(in
trip)
Others Total
2005-06

2006-07

2007-08

2008-09

2009-10


15. Price of quarry goods for 5 years (2005-2010)
Year
Katagal
(in No.)
Grapepole(in
No.)
Hyder(in
No.)
Parcy(in
sq.ft..)
Bandi(in
sq.ft.)
Chavani(in
No.)
Khadi(in
trip)
Others Total
2005-06

2006-07

2007-08

2008-09

2009-10


16. Income of the quarry goods for 5 years (2005-2010)
Year
Katagal
(in No.)
Grapepole(in
No.)
Hyder(in
No.)
Parcy(in
sq.ft..)
Bandi(in
sq.ft.)
Chavani(in
No.)
Khadi(in
trip)
Others Total
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