Handicraft System

Under the handicraft system the processes of production were extremely simple. Machinery was not used much. The artisans worked mostly with simple, crude and inexpensive tools. Most of the work was done by hand. Hence, industry did require much capital. Production was labor intensive. A worker who started manufacturing a product carried it through all stages. The design of the product and its finish depended entirely on the handiwork of he artisan. The organization of industry was elementary. The family of the artisan was the unit of organization Since production was carried on chiefly for a small local market, the division of labor was of a very simple type, and was introduced on a small scale. The modern means of transport were not available for the conveyance of raw materials from distant places and the transportation of the finished products to the remote markets. The artisan was, therefore, compelled together the supplies of raw materials from the neighbored and sell his products in his own locality.
Thus, artisans living in villages produced the requirements of th local people, and generally worked on th basis of yearly payments in exchange of goods supplied to meet requirements of farmers.