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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 carried
out by Akshay Kumar, PSVKM’s Narsee Monjee Institute of Management Studies, Bangalore
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 the
again’ (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 work
in 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 to
Government of India. There are 1393 jails in India and in             identify and train entrepreneurs from inmates
it reside nearly 3.6 Lakh inmates as per National Crime               who could start micro- or small enterprises thus
Records Bureau (NCRB), 2010. Majority of the inmates                  imbibed as value contributing citizens.
work in general maintenance assignments including                    Empowerment: Here the motive is to increase
cleaning, repair and support functions. Experts agree                 the social, economical and gender strength of
that employment at jails provide important benefits.                  the women inmates transforming them into
First, by keeping the inmates in productive work, it                  economically independent individuals.
reduces the tensions within the jails. Second, it equips
                                                                     Social       enterprise:      Collective       large
inmates to learn new work habits and routines and earn
                                                                      organizational forms that can sustain agri-based
better wages. Finally, research studies indicate the rate
                                                                      or other industrial products and services that
of recidivism is lower for inmates with some skill
                                                                      can be standardized distributed and monetized
exposure.
                                                                      over longer customer base.
Most Jails in India offer skill development, work,
                                                              Rehabilitation programs in Indian Jails
entrepreneurship and empowerment programmes to
the inmates. Most of these initiatives are targeted at        Several models emerge for rehabilitation. The models
creating 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 development
sustainable 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 “sustained
Various rehabilitation and reform studies and research        intervention”, by creating scalable, sustainable
is done on changing the behaviour of the inmates and          businesses that not only provides opportunities to
trying to reduce re-offences.                                 inmates through training and on-the job learning, but
                                                              also creates economic returns to make significant
Rehabilitation regimes comprise a number of different
                                                              savings in the overall management of jails and
types of intervention. Most fundamental purpose is to
                                                              prisoners.
actively engage prisoners and equip prisoners with life
and work skills. There are number of benefits from            Based on the above, some models may exhibit higher
inmates working inside prisons: from reduced                  risks and revenues, while others would exhibit low
recidivism, reduced depression and violence in prisons,       sustainability and scalability. Training and in-house
ease of assimilation for inmate as a productive citizen       entrepreneurship development programs may be less
on release, increased availability of trained manpower        costly, low risk, but their long term impact would be
for industrial growth, and importantly reduced costs for      difficult to estimate. Localized, jail specific measures
public     exchequer.     With     targeted    economic       like weaving or tailoring may be effective in creating
rehabilitation programs, offenders would have an              very few entrepreneurs, but their economic
opportunity and formal mechanisms to lend themselves          sustainability and scalability across jails remains
as valuable citizenry.       Well executed economic           questionable. Agricultural and other related activities
rehabilitation can facilitate transformation of               may be helpful in creating resources and crops for own
individuals and hence improve reforms of offenders.           consumption, thus cost savings, but their sustainability
                                                              as free and solid economic enterprises remains
Economic 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
the state government requirement while products like           operative society has 40 inmates as members. Out of
bread and pickles manufactured are sold in the market          these inmates, one Inmate is Secretary & the jail
through the TJ outlets in and around Delhi. The                superintendent is the Chief Patron. The co-operative
approximate earnings of the Jail factory is Rs 10 to 15        society is legal because it is registered under societies
crores. According to data from National Crime Records          registration act & approved by prison headquarters. The
Bureau (NCRB) 2010, 36,995 inmates were trained                Initiative is being funded on the basis of collective
during the year. Weaving, Tailoring, Carpentry,                cooperation of all the members of the society. The
Agriculture and Handloom are major training areas. The         Prisons Department, Government of Kerala, has raised
Andhra Pradesh Jails have also been in manufacturing           revenues from Rs 2.18 crore in 2009-2010 to Rs 2.68
and selling various products through the Jail factory.         crore in 2010-11. It is expected to cross Rs 3.5 crore by
Some of the products manufactured are Steel Furniture,         March this year and most likely to become a whopping
Soap, Agricultural Produces (Pulses and fruits), Bakery        Rs 5 crore by the end of 2012.
Products, Printing and Candles. The total revenue
earned by all the jails in Andhra Pradesh was Rs. 5.31         Despite the increase in the rehabilitation programs
crores for year 2010-11. The old Surat Jail and                there are many challenges to sustain them.
Sabarmati Central Jail in Ahmedabad have pakora
centres. Snacks are sold cheaper than market rates.                1. Many of these programs are at best limited to a
Profits accruing from sale of pakoras are used to pay                 prison. No uniform model used by jails across
prisoner’s labour charges. It also contributes to their jail          states and within States leading to considerable
welfare fund. The snacks centre of the Surat jail has a               time and efforts lost on reengineering of the
turnover of Rs.60 lakh a year.                                        experiments to make them profitable.
                                                                   2. State level apparatus to sustain the business
Inmates in the 35 central prisons across the state of                 and a comprehensive model to direct and
Maharashtra manufacture some 70 products. All the                     address the issues of sustainability, scalability
jails 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 valuable
fallen down to Rs. 9.15 crores (Aug 2011). In the                     efforts are lost the moment the officers leave or
Bangalore Central Jail, the main production activities                transferred.
are Carpentary, Weaving, Tailoring, Smiti (Almairahs &             4. Operational challenges such as pricing the
steel items), Printing Press & Bakery. All the initiatives            goods, work force to produce and sell the
are funded by the state government and the                            product, maintaining quality, challenges in
government has fixed a 15% profit margin. The Tihar Jail              increasing the customer base and lack of
has also entered into PPP agreements with DEIEM India                 branding and marketing of the products pose
and Century Pvt Ltd which train the inmates on the                    major challenges to the overall success of the
products manufactured by them in Tihar jail and then                  Jail factory.
absorb them into their respective organizations at the             5. Prison department internal structure and
end of the term. A BPO Centre has been established at                 engagements with other government agencies
Central Prison, Cherlapalli, Andhra Pradesh under PPP                 lacks “formalized structure” necessary to
model with the Assistance of M/s Radiant Info Systems                 provide required bureaucratic legitimacy and
Limited. 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 the
process and transmit information. Agarbathi & Ice                     jail and inmates in it. It is unlikely that he would
Candy Stick Mfg Units Established under Private &                     have the expertise and knowledge to run a jail
Public Partnership (PPP) at Central Prison, Cherlapalli &             factory. This has been a land of experiments
Warangal, Andhra Pradesh and cashew nut peeling Unit                  rather than the use of standardized model.
by M/s. Olam Agro Industries Established at Central                7. A large number of products manufactured are
Prison, Visakhapatnam, Andhra Pradesh. Gujarat’s                      either left unsold or sold at a price lesser than
Lajpore Jail has tied with local commerce bodies and                  the cost indicating the incorrect selection of
corporate houses by entering into PPP agreements. The                 products or markets that could be explored
jail inmates are being given vocational training in                   taking into consideration the model of
diamond polishing, artificial zari-making and sari                    engagement for each of the products and
weaving which would help the local commerce bodies                    benefits derived from the same. Many prison
in their future production. The Dasna Jail in Uttar                   factory experiments are turning red because of
Pradesh has started a co-operative society in the jail                inadequate assessment in selection of the
which has inmates as members. Currently, the co-
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 require
develop infrastructure, and well- being of the prisoners,            some amount of training.
there is a need to create sustainable organizational                Product acceptance in the market: The
forms that can run cost-effective and efficient prison               manufacture of those products for which there
rehabilitation program.        In line with Institute of             is a market with less competition and the
Correctional Administration, Chandigarh’s report on                  market is open to the sale of the prison
National Policy on Prison in 2006, to make a prison                  products. Eg: Candle making, medicinal plants
administration run on economic criterion of making                   are niche products having less competition but
itself sustainable, efficient, cost-effective and dynamic,           a considerable demand.
appropriate state-level apparatus is required. State                Products amenable for branding: Products that
level organizational forms can not only bring in required            can be branded or co-branded depending upon
scale 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 could
and society.                                                         be branded / co branded.
State Jail Industry Board                                           Socially Appealing Products: Products that have
                                                                     social acceptance and could be placed in the
To ensure the sustained intervention, there is an                    market considering the location and the
emerging 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 sell
Jail Industry board (JIB). Unlike the Jail Boards in other           in the open market for its regular demand and
countries, 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 cost
suggesting a state level authority with oversight                    of production in terms of material, machines
capacity. District and all prisons would be working with             and other costs are low considering the
the state level Jail Board to identify products that not             location. Eg: Chips making in Kerala could be an
only meet internal demand (hence reduce the                          inexpensive        exercise  considering     the
exchequer cost), but also generate additional revenues.              procurement of raw material and any jail having
Based on our analysis of prison factories of AP,                     a large area /piece of land could invest on
Karnataka and other states, we suggest viable products               medicinal plants.
may be identified based on following criteria. (Refer               Distribution of Products: The channels through
Table 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.
   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. Thus
The 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 based
The 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 limited
Jail Industry Board: what is the best organizational                 scope for production of commodities and
model?                                                               concentrates only on specific products that
                                                                     promote their objective.
The structure would be such that the there would be
participation of the government, private entities and        PPP (Public Private Partnership): This model involves
not for profit organisations who would engage in the         the jail industries board registering as a company
decision 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
partners to promote and enhance the market for the           Table 1: Product suitability for State level jail Board
products. Such partnerships are characterized by the         Products                                            Score (100)
sharing of investment, risk, responsibility and reward       Dairy                                                       67
between the partners. Thus the companies become              Indian snacks                                               89
accountable for the direct growth and development of         Medicinal Plants                                            90
these 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 framework
Evaluating the pros and cons of both the models, the                                        within              institutional
advantages of the PPP model outweigh the                                                    charter
                                                             Skill               Carpentry, weaving,            PPP, NGO
disadvantages. The PPP model could prove to be a
                                                             development/        tailoring, candles,
successful model with good governance, structured            Re-skilling         bakery
framework, 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-op
industries and training to improve skill sets and                                blankets.
                                                             Low Cost of         Carpentry, weaving,            Sec 25 Company
employment.
                                                             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
Bibliography                                               Browne & Mohan insight are general in nature and does not represent
                                                           any specific individuals or entities. While all efforts are made to ensure
About PIA: Prison Industry Authority Overview.”            the information and status of entities in the insights is accurate, there
California      Prison       Industry Authority.           can be no guarantee for freshness of information. Browne & Mohan
                                                           insights are for information and knowledge update purpose only.
http://www.pia.ca.gov/pia_facts.html                       Information contained in the report has been obtained from sources
                                                           deemed reliable and no representation is made as to the accuracy
Atkinson, 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 in
The Urban Institute Reentry Roundtable Discussion          reliance thereon.
Paper, May 19—20, 2003
Enterprise Prison Institute. 2002. “Employing Prison
Inmates: Does it Work?” Bethesda, MD: Enterprise
Prison Institute.                                             © Browne & Mohan, 2012. All rights reserved


Federal Prison Industries, Inc. 1996. “Factories with
Fences.” Sandstone, MN: Federal Correctional
Institution. http://www.unicor.gov/history/index.htm.


Gorski, 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, and
Business: Competitive Realities in Washington State,
Master of Public Administration, University of
Washington, 2007

Saylor, W. G.and Gaes,G. G, “The Post-Release
Employment Project” Federal Prisons Journal 2, no. 4,
1992, pp. 33-36

Wang, Z, Prison Enterprise Financial Management
Innovation in the Context of China’s Prison System
Reform, International Business Research, Vol. 3, No. 2;
April 2010, 100-105.

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India prison reforms 2020 & State Industry Jail Board

  • 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 carried out by Akshay Kumar, PSVKM’s Narsee Monjee Institute of Management Studies, Bangalore
  • 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 the again’ (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 work in 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 to Government of India. There are 1393 jails in India and in identify and train entrepreneurs from inmates it reside nearly 3.6 Lakh inmates as per National Crime who could start micro- or small enterprises thus Records Bureau (NCRB), 2010. Majority of the inmates imbibed as value contributing citizens. work in general maintenance assignments including  Empowerment: Here the motive is to increase cleaning, repair and support functions. Experts agree the social, economical and gender strength of that employment at jails provide important benefits. the women inmates transforming them into First, by keeping the inmates in productive work, it economically independent individuals. reduces the tensions within the jails. Second, it equips  Social enterprise: Collective large inmates to learn new work habits and routines and earn organizational forms that can sustain agri-based better wages. Finally, research studies indicate the rate or other industrial products and services that of recidivism is lower for inmates with some skill can be standardized distributed and monetized exposure. over longer customer base. Most Jails in India offer skill development, work, Rehabilitation programs in Indian Jails entrepreneurship and empowerment programmes to the inmates. Most of these initiatives are targeted at Several models emerge for rehabilitation. The models creating 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 development sustainable 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 “sustained Various rehabilitation and reform studies and research intervention”, by creating scalable, sustainable is done on changing the behaviour of the inmates and businesses that not only provides opportunities to trying to reduce re-offences. inmates through training and on-the job learning, but also creates economic returns to make significant Rehabilitation regimes comprise a number of different savings in the overall management of jails and types of intervention. Most fundamental purpose is to prisoners. actively engage prisoners and equip prisoners with life and work skills. There are number of benefits from Based on the above, some models may exhibit higher inmates working inside prisons: from reduced risks and revenues, while others would exhibit low recidivism, reduced depression and violence in prisons, sustainability and scalability. Training and in-house ease of assimilation for inmate as a productive citizen entrepreneurship development programs may be less on release, increased availability of trained manpower costly, low risk, but their long term impact would be for industrial growth, and importantly reduced costs for difficult to estimate. Localized, jail specific measures public exchequer. With targeted economic like weaving or tailoring may be effective in creating rehabilitation programs, offenders would have an very few entrepreneurs, but their economic opportunity and formal mechanisms to lend themselves sustainability and scalability across jails remains as valuable citizenry. Well executed economic questionable. Agricultural and other related activities rehabilitation can facilitate transformation of may be helpful in creating resources and crops for own individuals and hence improve reforms of offenders. consumption, thus cost savings, but their sustainability as free and solid economic enterprises remains Economic 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. the state government requirement while products like operative society has 40 inmates as members. Out of bread and pickles manufactured are sold in the market these inmates, one Inmate is Secretary & the jail through the TJ outlets in and around Delhi. The superintendent is the Chief Patron. The co-operative approximate earnings of the Jail factory is Rs 10 to 15 society is legal because it is registered under societies crores. According to data from National Crime Records registration act & approved by prison headquarters. The Bureau (NCRB) 2010, 36,995 inmates were trained Initiative is being funded on the basis of collective during the year. Weaving, Tailoring, Carpentry, cooperation of all the members of the society. The Agriculture and Handloom are major training areas. The Prisons Department, Government of Kerala, has raised Andhra Pradesh Jails have also been in manufacturing revenues from Rs 2.18 crore in 2009-2010 to Rs 2.68 and selling various products through the Jail factory. crore in 2010-11. It is expected to cross Rs 3.5 crore by Some of the products manufactured are Steel Furniture, March this year and most likely to become a whopping Soap, Agricultural Produces (Pulses and fruits), Bakery Rs 5 crore by the end of 2012. Products, Printing and Candles. The total revenue earned by all the jails in Andhra Pradesh was Rs. 5.31 Despite the increase in the rehabilitation programs crores for year 2010-11. The old Surat Jail and there are many challenges to sustain them. Sabarmati Central Jail in Ahmedabad have pakora centres. Snacks are sold cheaper than market rates. 1. Many of these programs are at best limited to a Profits accruing from sale of pakoras are used to pay prison. No uniform model used by jails across prisoner’s labour charges. It also contributes to their jail states and within States leading to considerable welfare fund. The snacks centre of the Surat jail has a time and efforts lost on reengineering of the turnover of Rs.60 lakh a year. experiments to make them profitable. 2. State level apparatus to sustain the business Inmates in the 35 central prisons across the state of and a comprehensive model to direct and Maharashtra manufacture some 70 products. All the address the issues of sustainability, scalability jails 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 valuable fallen down to Rs. 9.15 crores (Aug 2011). In the efforts are lost the moment the officers leave or Bangalore Central Jail, the main production activities transferred. are Carpentary, Weaving, Tailoring, Smiti (Almairahs & 4. Operational challenges such as pricing the steel items), Printing Press & Bakery. All the initiatives goods, work force to produce and sell the are funded by the state government and the product, maintaining quality, challenges in government has fixed a 15% profit margin. The Tihar Jail increasing the customer base and lack of has also entered into PPP agreements with DEIEM India branding and marketing of the products pose and Century Pvt Ltd which train the inmates on the major challenges to the overall success of the products manufactured by them in Tihar jail and then Jail factory. absorb them into their respective organizations at the 5. Prison department internal structure and end of the term. A BPO Centre has been established at engagements with other government agencies Central Prison, Cherlapalli, Andhra Pradesh under PPP lacks “formalized structure” necessary to model with the Assistance of M/s Radiant Info Systems provide required bureaucratic legitimacy and Limited. 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 the process and transmit information. Agarbathi & Ice jail and inmates in it. It is unlikely that he would Candy Stick Mfg Units Established under Private & have the expertise and knowledge to run a jail Public Partnership (PPP) at Central Prison, Cherlapalli & factory. This has been a land of experiments Warangal, Andhra Pradesh and cashew nut peeling Unit rather than the use of standardized model. by M/s. Olam Agro Industries Established at Central 7. A large number of products manufactured are Prison, Visakhapatnam, Andhra Pradesh. Gujarat’s either left unsold or sold at a price lesser than Lajpore Jail has tied with local commerce bodies and the cost indicating the incorrect selection of corporate houses by entering into PPP agreements. The products or markets that could be explored jail inmates are being given vocational training in taking into consideration the model of diamond polishing, artificial zari-making and sari engagement for each of the products and weaving which would help the local commerce bodies benefits derived from the same. Many prison in their future production. The Dasna Jail in Uttar factory experiments are turning red because of Pradesh has started a co-operative society in the jail inadequate assessment in selection of the which has inmates as members. Currently, the co-
  • 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 require develop infrastructure, and well- being of the prisoners, some amount of training. there is a need to create sustainable organizational  Product acceptance in the market: The forms that can run cost-effective and efficient prison manufacture of those products for which there rehabilitation program. In line with Institute of is a market with less competition and the Correctional Administration, Chandigarh’s report on market is open to the sale of the prison National Policy on Prison in 2006, to make a prison products. Eg: Candle making, medicinal plants administration run on economic criterion of making are niche products having less competition but itself sustainable, efficient, cost-effective and dynamic, a considerable demand. appropriate state-level apparatus is required. State  Products amenable for branding: Products that level organizational forms can not only bring in required can be branded or co-branded depending upon scale 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 could and society. be branded / co branded. State Jail Industry Board  Socially Appealing Products: Products that have social acceptance and could be placed in the To ensure the sustained intervention, there is an market considering the location and the emerging 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 sell Jail Industry board (JIB). Unlike the Jail Boards in other in the open market for its regular demand and countries, 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 cost suggesting a state level authority with oversight of production in terms of material, machines capacity. District and all prisons would be working with and other costs are low considering the the state level Jail Board to identify products that not location. Eg: Chips making in Kerala could be an only meet internal demand (hence reduce the inexpensive exercise considering the exchequer cost), but also generate additional revenues. procurement of raw material and any jail having Based on our analysis of prison factories of AP, a large area /piece of land could invest on Karnataka and other states, we suggest viable products medicinal plants. may be identified based on following criteria. (Refer  Distribution of Products: The channels through Table 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. 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. Thus The 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 based The 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 limited Jail Industry Board: what is the best organizational scope for production of commodities and model? concentrates only on specific products that promote their objective. The structure would be such that the there would be participation of the government, private entities and PPP (Public Private Partnership): This model involves not for profit organisations who would engage in the the jail industries board registering as a company decision 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. partners to promote and enhance the market for the Table 1: Product suitability for State level jail Board products. Such partnerships are characterized by the Products Score (100) sharing of investment, risk, responsibility and reward Dairy 67 between the partners. Thus the companies become Indian snacks 89 accountable for the direct growth and development of Medicinal Plants 90 these 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 framework Evaluating the pros and cons of both the models, the within institutional advantages of the PPP model outweigh the charter Skill Carpentry, weaving, PPP, NGO disadvantages. The PPP model could prove to be a development/ tailoring, candles, successful model with good governance, structured Re-skilling bakery framework, 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-op industries and training to improve skill sets and blankets. Low Cost of Carpentry, weaving, Sec 25 Company employment. 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. Bibliography Browne & Mohan insight are general in nature and does not represent any specific individuals or entities. While all efforts are made to ensure About PIA: Prison Industry Authority Overview.” the information and status of entities in the insights is accurate, there California Prison Industry Authority. can be no guarantee for freshness of information. Browne & Mohan insights are for information and knowledge update purpose only. http://www.pia.ca.gov/pia_facts.html Information contained in the report has been obtained from sources deemed reliable and no representation is made as to the accuracy Atkinson, 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 in The Urban Institute Reentry Roundtable Discussion reliance thereon. Paper, May 19—20, 2003 Enterprise Prison Institute. 2002. “Employing Prison Inmates: Does it Work?” Bethesda, MD: Enterprise Prison Institute. © Browne & Mohan, 2012. All rights reserved Federal Prison Industries, Inc. 1996. “Factories with Fences.” Sandstone, MN: Federal Correctional Institution. http://www.unicor.gov/history/index.htm. Gorski, 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, and Business: Competitive Realities in Washington State, Master of Public Administration, University of Washington, 2007 Saylor, W. G.and Gaes,G. G, “The Post-Release Employment Project” Federal Prisons Journal 2, no. 4, 1992, pp. 33-36 Wang, Z, Prison Enterprise Financial Management Innovation in the Context of China’s Prison System Reform, International Business Research, Vol. 3, No. 2; April 2010, 100-105.