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India prison reforms 2020 & State Industry Jail Board


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Reformation and rehabilitation of jail inmates is a principle laid down in the UN Standard Minimum Rules, 1955, and is the corner-stone of the correctional policy of the Government of India. Most Jails in India offer skill development, work, entrepreneurship and empowerment programmes to the inmates. Most of these initiatives are targeted at creating small manufacturing or agri-based programs with majority of produce for self consumption. In this paper we analyse current programs and suggest setting up of a state level industry Board. The paper desrcibes the structural arrangements and how scale and sustainability can be achieved.

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India prison reforms 2020 & State Industry Jail Board

  1. 1. Browne & Mohan Board & CEO Advisors, Management consultants Indian prisons reforms 2020 and State Jail Industry Board Pratibha Sharma, Asst Consultant (Strategy and Finance Group)** All pictures shown above are proprietary of owners. Some Part of the report is based on summer internship carriedout by Akshay Kumar, PSVKM’s Narsee Monjee Institute of Management Studies, Bangalore
  2. 2. Introduction labour intensive industries such as Construction, Machine tool, etc.‘Rehabilitation’ refers to ‘re-enabling’ or ‘making fit  Work programme: It is an integral part of theagain’ (from the Latin word ‘rehabilitare’). Reformation correctional programme implemented by jails.and rehabilitation of jail inmates is a principle laid down Besides, all the jail inmates participating in workin the UN Standard Minimum Rules, 1955, and is the programmes are paid ‘parity’ wages.corner-stone of the correctional policy of the  Entrepreneurship: Where the objective is toGovernment of India. There are 1393 jails in India and in identify and train entrepreneurs from inmatesit reside nearly 3.6 Lakh inmates as per National Crime who could start micro- or small enterprises thusRecords Bureau (NCRB), 2010. Majority of the inmates imbibed as value contributing in general maintenance assignments including  Empowerment: Here the motive is to increasecleaning, repair and support functions. Experts agree the social, economical and gender strength ofthat employment at jails provide important benefits. the women inmates transforming them intoFirst, by keeping the inmates in productive work, it economically independent individuals.reduces the tensions within the jails. Second, it equips  Social enterprise: Collective largeinmates to learn new work habits and routines and earn organizational forms that can sustain agri-basedbetter wages. Finally, research studies indicate the rate or other industrial products and services thatof recidivism is lower for inmates with some skill can be standardized distributed and monetizedexposure. over longer customer base.Most Jails in India offer skill development, work, Rehabilitation programs in Indian Jailsentrepreneurship and empowerment programmes tothe inmates. Most of these initiatives are targeted at Several models emerge for rehabilitation. The modelscreating small manufacturing or agri-based programs can serve two large national goals: passive or active.with majority of produce for self consumption. Efforts Passive goals could be empowerment, employment,are being made by Jails to create scalable and skill development or entrepreneurship developmentsustainable business that can build long term economic training where in the objective could be “facilitation”.benefits to jail inmates and overall prison development. On the other hand, active gaols could be “sustainedVarious rehabilitation and reform studies and research intervention”, by creating scalable, sustainableis done on changing the behaviour of the inmates and businesses that not only provides opportunities totrying to reduce re-offences. inmates through training and on-the job learning, but also creates economic returns to make significantRehabilitation regimes comprise a number of different savings in the overall management of jails andtypes of intervention. Most fundamental purpose is to prisoners.actively engage prisoners and equip prisoners with lifeand work skills. There are number of benefits from Based on the above, some models may exhibit higherinmates working inside prisons: from reduced risks and revenues, while others would exhibit lowrecidivism, reduced depression and violence in prisons, sustainability and scalability. Training and in-houseease of assimilation for inmate as a productive citizen entrepreneurship development programs may be lesson release, increased availability of trained manpower costly, low risk, but their long term impact would befor industrial growth, and importantly reduced costs for difficult to estimate. Localized, jail specific measurespublic exchequer. With targeted economic like weaving or tailoring may be effective in creatingrehabilitation programs, offenders would have an very few entrepreneurs, but their economicopportunity and formal mechanisms to lend themselves sustainability and scalability across jails remainsas valuable citizenry. Well executed economic questionable. Agricultural and other related activitiesrehabilitation can facilitate transformation of may be helpful in creating resources and crops for ownindividuals and hence improve reforms of offenders. consumption, thus cost savings, but their sustainability as free and solid economic enterprises remainsEconomic Rehabilitation can be achieved through: questionable.  Skill development: Enhancement of existing Tihar Jail has been considered as a pioneer in the skills or introduction of vocational skills for economic rehabilitation program in India. It has nearly inmates. The objective is to minimize the 12000 inmates. Tihar Jail Factory produces and markets demand-supply skill gaps of nation. NSDC and products under the brand TJ’s. It involves in various other targeted programs may be effectively activities namely: Carpentry, Weaving, Tailoring & used for creating the skill base, especially for Baking School. Some products manufactured cater to
  3. 3. the state government requirement while products like operative society has 40 inmates as members. Out ofbread and pickles manufactured are sold in the market these inmates, one Inmate is Secretary & the jailthrough the TJ outlets in and around Delhi. The superintendent is the Chief Patron. The co-operativeapproximate earnings of the Jail factory is Rs 10 to 15 society is legal because it is registered under societiescrores. According to data from National Crime Records registration act & approved by prison headquarters. TheBureau (NCRB) 2010, 36,995 inmates were trained Initiative is being funded on the basis of collectiveduring the year. Weaving, Tailoring, Carpentry, cooperation of all the members of the society. TheAgriculture and Handloom are major training areas. The Prisons Department, Government of Kerala, has raisedAndhra Pradesh Jails have also been in manufacturing revenues from Rs 2.18 crore in 2009-2010 to Rs 2.68and selling various products through the Jail factory. crore in 2010-11. It is expected to cross Rs 3.5 crore bySome of the products manufactured are Steel Furniture, March this year and most likely to become a whoppingSoap, Agricultural Produces (Pulses and fruits), Bakery Rs 5 crore by the end of 2012.Products, Printing and Candles. The total revenueearned by all the jails in Andhra Pradesh was Rs. 5.31 Despite the increase in the rehabilitation programscrores for year 2010-11. The old Surat Jail and there are many challenges to sustain them.Sabarmati Central Jail in Ahmedabad have pakoracentres. Snacks are sold cheaper than market rates. 1. Many of these programs are at best limited to aProfits accruing from sale of pakoras are used to pay prison. No uniform model used by jails acrossprisoner’s labour charges. It also contributes to their jail states and within States leading to considerablewelfare fund. The snacks centre of the Surat jail has a time and efforts lost on reengineering of theturnover of Rs.60 lakh a year. experiments to make them profitable. 2. State level apparatus to sustain the businessInmates in the 35 central prisons across the state of and a comprehensive model to direct andMaharashtra manufacture some 70 products. All the address the issues of sustainability, scalabilityjails in total recorded a turnover of Rs. 35 crores and and profitability of the jail produce is missing.profit of Rs. 9.44 crores in 1995. But today revenue has 3. Scalability and sustainability of the valuablefallen down to Rs. 9.15 crores (Aug 2011). In the efforts are lost the moment the officers leave orBangalore Central Jail, the main production activities transferred.are Carpentary, Weaving, Tailoring, Smiti (Almairahs & 4. Operational challenges such as pricing thesteel items), Printing Press & Bakery. All the initiatives goods, work force to produce and sell theare funded by the state government and the product, maintaining quality, challenges ingovernment has fixed a 15% profit margin. The Tihar Jail increasing the customer base and lack ofhas also entered into PPP agreements with DEIEM India branding and marketing of the products poseand Century Pvt Ltd which train the inmates on the major challenges to the overall success of theproducts manufactured by them in Tihar jail and then Jail factory.absorb them into their respective organizations at the 5. Prison department internal structure andend of the term. A BPO Centre has been established at engagements with other government agenciesCentral Prison, Cherlapalli, Andhra Pradesh under PPP lacks “formalized structure” necessary tomodel with the Assistance of M/s Radiant Info Systems provide required bureaucratic legitimacy andLimited. The unit employs about 200 educated convicts longevity.who handle back office operations like data entry, and 6. A Jail Superintendent is required to manage theprocess and transmit information. Agarbathi & Ice jail and inmates in it. It is unlikely that he wouldCandy Stick Mfg Units Established under Private & have the expertise and knowledge to run a jailPublic Partnership (PPP) at Central Prison, Cherlapalli & factory. This has been a land of experimentsWarangal, Andhra Pradesh and cashew nut peeling Unit rather than the use of standardized M/s. Olam Agro Industries Established at Central 7. A large number of products manufactured arePrison, Visakhapatnam, Andhra Pradesh. Gujarat’s either left unsold or sold at a price lesser thanLajpore Jail has tied with local commerce bodies and the cost indicating the incorrect selection ofcorporate houses by entering into PPP agreements. The products or markets that could be exploredjail inmates are being given vocational training in taking into consideration the model ofdiamond polishing, artificial zari-making and sari engagement for each of the products andweaving which would help the local commerce bodies benefits derived from the same. Many prisonin their future production. The Dasna Jail in Uttar factory experiments are turning red because ofPradesh has started a co-operative society in the jail inadequate assessment in selection of thewhich has inmates as members. Currently, the co-
  4. 4. products to be produced and distributed by the  Skill Requirement of inmates: The level of skill jail. required for the production would vary from each product. Eg: Almirahs, bakery products,Considering the immense pressure on the exchequer to candle making and incense sticks would requiredevelop infrastructure, and well- being of the prisoners, some amount of training.there is a need to create sustainable organizational  Product acceptance in the market: Theforms that can run cost-effective and efficient prison manufacture of those products for which thererehabilitation program. In line with Institute of is a market with less competition and theCorrectional Administration, Chandigarh’s report on market is open to the sale of the prisonNational Policy on Prison in 2006, to make a prison products. Eg: Candle making, medicinal plantsadministration run on economic criterion of making are niche products having less competition butitself sustainable, efficient, cost-effective and dynamic, a considerable demand.appropriate state-level apparatus is required. State  Products amenable for branding: Products thatlevel organizational forms can not only bring in required can be branded or co-branded depending uponscale advantages they can also ensure the education the model and level of engagement. Eg:and work programs remain more useful to both inmates Candle/Incense sticks, Traditional snacks couldand society. be branded / co branded.State Jail Industry Board  Socially Appealing Products: Products that have social acceptance and could be placed in theTo ensure the sustained intervention, there is an market considering the location and theemerging need for the states to uniformly develop and sentiment of the population. Eg: Incense sticks,co-ordinate jail industries through the formation of a traditional snacks could be products easy to sellJail Industry board (JIB). Unlike the Jail Boards in other in the open market for its regular demand andcountries, which are only state entities with no local jail its regional feel.authority (See, Washington Jail Board), we are  Cost of Production: Products for which the costsuggesting a state level authority with oversight of production in terms of material, machinescapacity. District and all prisons would be working with and other costs are low considering thethe state level Jail Board to identify products that not location. Eg: Chips making in Kerala could be anonly meet internal demand (hence reduce the inexpensive exercise considering theexchequer cost), but also generate additional revenues. procurement of raw material and any jail havingBased on our analysis of prison factories of AP, a large area /piece of land could invest onKarnataka and other states, we suggest viable products medicinal plants.may be identified based on following criteria. (Refer  Distribution of Products: The channels throughTable 1) which the product is available for consumption by the consumer. Depending upon the  Shelf Life of Products: The length of time the perishable nature of the product the food, beverages or any perishable item is given distribution channel is selected. For Eg: before it is considered unsuitable for sale, use Products like milk and bakery products can only or consumption. Eg: Milk, Bakery and be distributed and sold to the immediate/local Horticulture consumer whereas products like Almirah, and  Intermediate goods: Intermediate goods could candles and incense sticks could have a wide be semi-finished goods which can be used as an distribution. input in the production of other goods. In other words this sale could also be termed as Operations within the prisons are supported by sales to business to business selling (B2B). Finished state agencies and local governments. Thousands of goods are fit to be sold to the direct consumer offenders gain work experience and training as they (B2C).Eg: Medicinal Plants which could be produce high quality, competitively priced products, cultivated for pharmaceutical companies. which translates into enormous benefits for taxpayers,  Continuous Demand for the product: Products the inmates and the government. The Jail Industries for which a market exists , those products Board is a 21-member volunteer board whose goal is to where government is also a consumer and help government establish and maintain inmate work there is a regular demand. Eg: Milk, Bakery programs. The outcomes of setting up a board are products, horticulture, medicinal plants, evident as: chapattis are generic and routine products for which there is a regular demand.
  5. 5.  Jail operational costs are reduced through jail There are various engagement models that could be industries. pursued to achieve the objective and based on the  All levels of government and investors could criteria and the feature of each model the product financially benefit from industry operations that could be selected (Refer Table2 and Table3).The provide products at reduced costs. argument relating to the constitution of the Jail board  The inmates develop awareness and would be whether to form a PPP or a Sec 25 Company. employable skills. Section 25 Company by definition are those companies A combination of vocational training and jail which are formed for the sole purpose of promoting industries employment is a good policy that can commerce, art, science, religion, charity or any other assist in ensuring a successful strategy for jails and useful object and have been granted a license by the the government. To elaborate on the concept of the central government recognizing them as such. Such Jail Industry Board, certain objectives and models companies should intend to apply its profits, if any or have to be stated for consideration. other incomes only in promoting its objects and must also prohibit payment of dividend to its members. ThusThe objective of the State jail industry board: there are three criteria for determining whether a particular company is section 25 company or not: 1) Its  Effectively manage the correctional and objects should be only to promote commerce, art, rehabilitation program. science, religion, charity or any other useful object.2) It  Facilitate the smooth functioning of the jail should intend to apply its profits or other incomes only industries in promoting its objects; and3) Central government  Create an institution and a formal structure for should have granted a license to such a company sustaining and developing the jail industries recognizing them as such.  Create awareness in the market regarding the jail industries and effective marketing /branding Advantages of a Section 25 company: of the products.  The tax benefit to the private investors basedThe Jail Industries Board may constitute the following on representation.members:  A Sec 25 company can increase the number of directors without seeking the approval of the  Chairman central government.  Board of Directors  The shares and other interest of any member in  Secretary the Company shall be a movable property and  One official elected by the National Commission can be transferable in the manner provided by on Prisons to advise and guide the jail industries the Articles, which is otherwise not easily program. possible in other business forms. Therefore, it is  Two representative from District and other Jails easier to become or leave the membership of in the State the Company or otherwise it is easier to  Representatives from the industry transfer the ownership.  Representatives from industry associations  Representatives from NGOs for the training and Disadvantages of a Section 25 company: skill development.  A Section 25 company has to ensure that its The Chairman and Secretary could be the higher profits are not distributed as dividend among its officials from the Prison and Police department of members. the state. Operational aspects can be managed by  The government has a major decision making employing people in administration, finance, role to play which minimises the involvement of training, technical requirements etc. the private companies.  The companies thus formed provide limitedJail Industry Board: what is the best organizational scope for production of commodities andmodel? concentrates only on specific products that promote their objective.The structure would be such that the there would beparticipation of the government, private entities and PPP (Public Private Partnership): This model involvesnot for profit organisations who would engage in the the jail industries board registering as a companydecision making and implementation of various comprising of both public and private in its structure.processes and systems to encourage the jail industries. This model aims at the increasing support of private
  6. 6. partners to promote and enhance the market for the Table 1: Product suitability for State level jail Boardproducts. Such partnerships are characterized by the Products Score (100)sharing of investment, risk, responsibility and reward Dairy 67between the partners. Thus the companies become Indian snacks 89accountable for the direct growth and development of Medicinal Plants 90these industries. Advantages of PPP: Steel Furniture (including Almirah) 78  The main advantage of a PPP is the creation of Candles/incense sticks 96 Chapathis 90 value for money which is a collection of several Horticulture 86 factors such as risk sharing, performance Score based on variables including shelf-life, distribution requirements, measures and incentives for growth. whether demand is continuous or sporadic, skill requirement, possibilities of  The PPP would encourage the involvement of branding, cost of production, incumbent competition, etc. both public and private decision making for the betterment of the jail industries. Table 2: Comparison between various economic rehabilitation models pursued:  At the same time the investor’s interest in these Criteria PPP Co- Sec 25 NGO industries would increase considering the operative Compa return on investment. Society ny  Fast, efficient and cost effective delivery of Profitability High Moderate Moder Non Profit products. ate Risk High High Moder Low  Cross transfer of public and private sector skills, ate knowledge and expertise. Stakeholder Private Inmates Govt NGO interest company Disadvantages of PPP:  There is a risk that the private sector party will either go bankrupt, or make very large profits. Scalability High Limited High Limited Both outcomes can create political problems for Legal Moderat High Low Low the government, causing it to intervene. challenges e  Work culture difference or the differences Incorporation Low Moderate High Low between the functioning of the public or Cost government agency and private sector firm can Benefit to High High Moder High inmates ate lead to problems  Mismanagement is always a potential threat to programs which are jointly undertaken by the Table 3: Best fit between goals and institutional framework public and private sector. Charter Activities Appropriate frameworkEvaluating the pros and cons of both the models, the within institutionaladvantages of the PPP model outweigh the charter Skill Carpentry, weaving, PPP, NGOdisadvantages. The PPP model could prove to be a development/ tailoring, candles,successful model with good governance, structured Re-skilling bakeryframework, sound economic policy and mutual support. Empowerment Tailoring, bakery, diary, Sec 25 Company, NGO,The JIB will encourage the linkage between jail clothing, woollen Co-opindustries and training to improve skill sets and blankets. Low Cost of Carpentry, weaving, Sec 25 Companyemployment. training tailoring, diary, horticulture Sustainability Furniture, printing, PPP, Sec 25 Company carpentry, tailoring. Entrepreneur Carpentry, bakery, PPP, NGO Opportunity Indian snacks, clothing, PPP, Co-op, Sec 25 bakery,medicinal plants company Set Aside Diary, horticulture, Sec 25 Company, PPP procurement Chapatis Branding Steel furniture, bakery, PPP, Sec 25 Company candles, diary, snacks
  7. 7. Bibliography Browne & Mohan insight are general in nature and does not represent any specific individuals or entities. While all efforts are made to ensureAbout PIA: Prison Industry Authority Overview.” the information and status of entities in the insights is accurate, thereCalifornia Prison Industry Authority. can be no guarantee for freshness of information. Browne & Mohan insights are for information and knowledge update purpose only. Information contained in the report has been obtained from sources deemed reliable and no representation is made as to the accuracyAtkinson, R and Rostad, K.A. Can Inmates Become an thereof. Neither Browne & Mohan nor its affiliates, officers, directors,Integral Part of the U.S.Workforce, employees, owners, representatives nor any of its data or content providers shall be liable for any errors or for any actions taken inThe Urban Institute Reentry Roundtable Discussion reliance thereon.Paper, May 19—20, 2003Enterprise Prison Institute. 2002. “Employing PrisonInmates: Does it Work?” Bethesda, MD: EnterprisePrison Institute. © Browne & Mohan, 2012. All rights reservedFederal Prison Industries, Inc. 1996. “Factories withFences.” Sandstone, MN: Federal CorrectionalInstitution., R. J. and Jacobsen, V.J. “The State of Jail Industries.” Large Jail Network bulletin 2 (1): 1990, pp.13-16.Henderson, E.C, Jail Industries, Labor Unions, andBusiness: Competitive Realities in Washington State,Master of Public Administration, University ofWashington, 2007Saylor, W. G.and Gaes,G. G, “The Post-ReleaseEmployment Project” Federal Prisons Journal 2, no. 4,1992, pp. 33-36Wang, Z, Prison Enterprise Financial ManagementInnovation in the Context of China’s Prison SystemReform, International Business Research, Vol. 3, No. 2;April 2010, 100-105.