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An Assessment of Handicraft Sector of J&K with Reference to Central Kashmir

Mohd Rafiq Shah*

School of Commerce, DAVV Indore

*Corresponding Author:
Mohd Rafiq Shah
Research Scholar, School of Commerce
DAVV Indore, India
Tel: 0731 252 7532
E-mail: [email protected]

Received date May 02, 2016; Accepted date July 14, 2016; Published date July 21, 2016

Citation: Shah MR (2016) An Assessment of Handicraft Sector of J&K with Reference to Central Kashmir. Arabian J Bus Manag Review 6:258. 

Copyright: ©2016 Shah MR. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

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Kashmir popularly known as the paradise on earth has been very famous in handicrafts sector since ages. Central Kashmir (Heart of Kashmir) including Srinagar, Gandebal and Budgam is the hub for this sector. But unfortunately Jammu and Kashmir has not been able to attract investment from the private sector, and has remained an industrially backward state due to its unique economic obstacles arising out of remoteness and poor connectivity, hilly and often inhospitable terrain, poor infrastructure, sparse population density, shallow markets, and most importantly a law and order situation threatened by militancy. Besides such obstacles Kashmir is very famous in handicrafts because of its unique design, cost and quality of products. Handicrafts have remained a key economic activity in the state of Kashmir valley. Kashmir has also a great contribution towards exports from the handicraft sector. It is mainly labour intensive and hence causes no harm to economy. Besides, providing employment to literate as well as illiterate persons in both rural and urban areas, it acts as a subsidiary source for the farmers who remain un-employed during the off season. Government also plays a great role for the up liftment of this sector by providing various schemes. Carpet and Shawls occupy the most prominent place on the production front in Kashmir. Both males and females are dependent on this sector in Kashmir valley. Carpet, Shawls, Silver ware, paper Machie, Gabba making, Wood carving, Namdha so-on and so-forth are the major crafts used in the valley of Kashmir and thus contributes heavily towards the export of the state. Being eco-friendly, this sector suits to the state as it is more labour intensive and less capital intensive in nature, therefore, having scope for employment generation at a large scale. From societal point of view it is mostly preferred sector after agriculture because of suitable conditions in terms of topography of state. In economic terms it helps in generation of aggregate employment and raising per capita income of state and hence contributes to State Gross Domestic Product (SGDP) in particular and National Income (NI) in general. The present study entails the growth, strategies and various problems faced by the handicraft industry of Kashmir. The role of the government in promoting the craft will also be discussed before concluding the paper.


Government schemes; Indian handicraft; Employment; Production; Export; Socio-economic development

Indian Handicrafts Industry

Handicrafts are unique expressions of a particular culture or community through local craftsmanship and materials. India is a diverse country in terms of ethnic traditions and culture and also the hub of handicraft products. The Indian handicrafts industry is highly labor intensive cottage based industry and decentralized, being spread all over the country in rural and urban areas. India, being a developing country where Handicraft Sector is one of the emerging sectors playing a vital role in the economic development of country. The sector is estimated to employ Rs 68.86 lakh artisans at present and the export of handicrafts including handmade carpet up-to October 2014 has been Rs. 17265.11 crores which shows an increase of 23.16% over the same period in financial year 2013-14, and the plan allocation during 2014-15 is Rs. 247.00 crore invalid source specified. Government of India has taken many initiatives to promote and preserve this sector because of its cultural and several other peculiarities. For a country like India, where labour is abundant and capital scarce, the argument for handicrafts industry is very strong. Handicrafts can be set up anywhere in the country and thus can help in removing the regional disparities. Handicrafts enriches Indian heritage while combining in these crafts both utility and beauty [1]. The Handicraft industry has played a significant role in enriching the industrial base of the country. Indian handmade goods have, over the years, become the most dynamic sector for upliftment of Indian economy. Exquisite handicrafts using diverse raw materials are sourced from different parts of the country. This include art metal ware, wood ware, hand printed textiles and scarves, leather crafts, hand knotted carpets and embroidered goods, wood design, shawls as art ware, stone carvings, imitation jewelry and miscellaneous other handicrafts. In India, handicraft production is a major form of employment next to agriculture and constitutes a significant part of the export effect economy. Indian handicrafts sector has attained a prominent place in foreign exchange earnings also [2].

Handicrafts Sector of Kashmir-An Overview

Jammu and Kashmir, situated between 320 17′ N and 360 58′ N latitudes and 730 26′E and 800 30′ E longitudes, constitutes the northern most extremity of India and is bestowed by Almighty Allah with rich natural beauty. Kashmir, the state of India is a country of rich and diverse tradition, beauty, nature, festivals, colors, fragrances, languages and religions, therefore Kashmiri traditional handicrafts promises everything - beauty, dignity, form and style. The majestic appeal of Kashmiri arts and crafts lies in its exclusivity and mystical tone which leaves people mesmerized. Handicrafts activities occupy an important position in the economic structure of J&K State. The handicrafts activities are best suited to the state as these activities are more labour intensive and less capital intensive in nature, therefore having scope for employment generation opportunities at large scale. The J&K Handicrafts Department is playing a vital role in promoting handicrafts products in rural as well as in urban areas by providing financial and technical assistance to unemployed youth and artisans of the state for setting up micro and small units in industrial sectors under various schemes. Around 8500 persons are trained annually through 553 training centers in the state. Handicraft activities occupy an important position in the economic structure of J&K State. The Kashmiri handicraft products have earned worldwide fame for their attractive designs, functional utility and high quality craftsmanship. Handicrafts sector generates substantial foreign exchange for the country, while preserving its cultural heritage. It is also an important source of income for seasonal agricultural labour force. It acts as an instrument in increasing the living standard of rural people. It have great potential, as they hold the key for sustaining not only the existing set of thousands of artisans spread over length and breadth of the state, but also for the increasingly large number of new entrants in the crafts activity. As on 31.03.2014 there were 3005 handicrafts societies registered with a membership of 15084. The department provides Managerial subsidy on tapering basis @100% first year, 66%, 2nd year; and 33%, 3rd year to the pass out trainees which is paid for formation of cooperative societies. During the year 2014-15, 82 societies have been formed with a membership of 902 by the end of November, 2014. The most important crafts of handicraft industry of Kashmir are embroidery, Shawls, Crewels, Namda, Chain stitch, Papier machie, Costume, Jewelry, Kanishwals and Carpets hold a significant share in the overall production and export of the state [3,4]. The department of handicrafts promotes sale of handicraft goods by organizing expos/ exhibition/craft bazaars within and outside the state. Due to several problems faced by handicrafts entrepreneurs like exploitation of intermediaries this sector doesn’t show any remarkable growth like other sectors. So the government should address the problems and should take the corrective measures in order to boost this sector. Nevertheless, in-order to meet the challenges of this dynamic tastes and preferences of the customers handicraft producers must be more responsive in adapting designs to buyer requirements, provide timely production and delivery, and improve quality and efficiency in view of increased price competition and consumer expectations.

Objectives of the Study

⣠To study the growth, Strategies and problems faced by handicrafts sector.

⣠To study the role of government in promoting the handicraft sector by various schemes in Jammu and Kashmir.

⣠To analyze the Production and export of handicrafts sector of J&K.

⣠To analyze employment of handicrafts sector in central Kashmir.

Literature Review

Handicrafts are a form of industry and products that are, for the greater part made by hand. A lot of studies have been conducted on the handicrafts sector of Jammu and Kashmir since before. The brief account of Literature Review is given below:-

Sunita Sharma[5] in her study revealed the structure of industries in J&K state. She suggests that the state leans heavily towards the smallscale sector and to a little extent on medium industries. Heavy industry is completely absent in the state. However, the small scale industry has shown a continuous growth in number from 2203 in 1973-74 to 49,426 in 2006-07. The author further says that among the small scale industries, the handicraft industry occupies an important place in the economy of J&K state.

Suhail M. Ghouse [6] argues that the Indian handicrafts industry is highly labor intensive, cottage based and decentralized industry spread over rural as well as in urban areas of the country. Handicrafts are made from raw materials and can be produced in unlimited numbers. Such products can be utilitarian, aesthetic, artistic, creative, culturally attached, decorative, functional, traditional, religiously and socially symbolic and significant. Handicrafts sector has a great contribution towards employment generation and export thereby has a direct impact on the economic development of the economy.

Effat Yasmin and F. A. Bhat [7] revealed in their study that handicrafts sector have an important role to play in the development of country in general and J&K in particular. In the absence of large scale industries in the State, handicrafts have remained a key economic activity from times immemorial. They showed that the Production and sales of handicrafts have increased significantly during the last two decades. The major chunk of foreign exchange earnings to the State come from this sector. Crafts like shawls, crewels, namdha, chain stitch, wood carving, costume jewelry, kani shawls, paper mashi, and carpets hold a significant share in the overall production and export of the state.

Showkat and Sharad Tiwari [8] suggests in their study that the skill development and training programs have a far reaching impact on employment generation, production and economic growth, and provide very large amounts of sales and exports to our country, as well as the state’s economy. Handicraft is one of the biggest employment providers next to agriculture sector.


Exhaustive literature survey regarding the topic and related concepts has been done. Secondary data inclusive of quantitative and qualitative data as well collected from various sources including books, research papers, newspapers, magazines, and websites is used for the purpose of study.

Study Area

Central Kashmir has been selected for the study because of the reason that central Kashmir is an attractive tourist destination. No such study has been carried out on central Kashmir since before. Also, this region has a strong industrial base and has a rich history of producing handicraft products. This region is taken for the study also for the reason of unemployment as like other districts central Kashmir too suffers from unemployment among the educated and uneducated youth, and thus this study tries to find out the opportunity of these unemployed youth in handicrafts sector.

Production and Export of Handicrafts Goods in Jammu and Kashmir

Production: The sector has made a great contribution towards Production, Employment and Export of handicraft products. Lack of large scale industries in the state has encouraged people to focus more on small scale industries like handicrafts, handloom, horticulture etc. which in turn lead to satisfactory performance of this sector. The production of handicraft industry has been quite encouraging as shown below in Table 1.

Note:-From the above table year wise percentage of total production denotes the annual Percentage of the Production and the Percentage change in production shows the growth in production which may be increase or decrease.

Year Carpets Woolen shawls Paper Machie Other items Total Year wise
Percentage of Total production
Percentage change in production
(Growth rate) Increase/Decrease
2003-04 450.53 275 13.5 82.5 821.53   5.62    ___
2004-05 425 315 24 123 887 6.07 7.97
2005-06 425 310 30 135 900 6.16 1.46
2006-07 450.5 320 35 144.5 950 6.50 5.55
2007-08 761.27 420.58 37.92 394.82 1614.59 11.05 69.95
2008-09 457.6 303.45 35.49 303.46 1100 7.53 -31.87
2009-10 638.17 201.03 10.15 151.15 1000 6.84 -9.09
2010-11 735.1 343.1 38.32 533.78 1650.3 11.30 65.03
2011-12 624.7 702.2 102.7 385.73 1815.33 12.43 10
2012-13 643 656.3 145 398.91 1843.21 12.62 1.53
2013-14 684.05 631.2 141.24 559.33 2017.82 13.82 9.47
Total 6294.92 4477.86 613.32 3212.32 14599.78 100  

Table 1: Production of handicrafts goods in J&K ( crores).


Figure 1: Percentage of total production.

Percentage of total production=Production of the current year/ Total production * 100

Percentage change in production=Current year production- Previous year production/Previous year production * 100

The above Figure 1 indicates percentage of total production.

As is evident from Table 1 above, the Handicraft sector has shown a significant rising trend throughout the years. From 2003-2004 there is a continuous rise in the production of handicraft goods up to 2007-2008. In 2003-04 the production is Rs. 821.53 crores which has increased in 2004-05 (Rs. 887 crores), 2005-06 (Rs. 900 crores) and accordingly in 2006-07 (Rs. 950 crores). In 2007-2008 there is an abrupt increase in the production which is Rs. 1614.59 crores which is about 69.95% in comparison to previous year. The total percentage increase in 2007- 2008 is 11.05% which is more than previous year where it was only Rs. 950 Crore. In 2008-2009 a sudden fall in production is being noticed. In 2008-2009 the production is Rs. 1100 crores (-31.87) and in 2009- 20010 it has again decreased and reached up to Rs. 1000 crores (-9.09). This sudden fall in these two years is because of turmoil in Kashmir in these two years, politicalinstability, lower incentives etc. thus created huge loss to this sector. But in-order to recover the losses and because of huge demand in the market a significant rise was marked in productivity which is recorded as Rs. 1650.3 crores and total percentage of production is 11.30%. And finally the production of 2013-2014 is Rs. 2017.82 crores which is about 9.47% in comparison to the previous year.

Export: The products of the handicrafts sector have attracted the minds of the customers worldwide due to the quality and unique design of the Goods produced by the handicraft sector. Export of the handicraft products has the direct impact on the prosperity on the Indian economy in general and on the economy of the Kashmir in particular. The handicraft sector of the state has great contribution towards foreign exchange earnings of the country. The data given below in Table 2 exhibits the export of the handicraft products like carpets, woolen shawls and paper Machie w-e-f 2003-2004 to 2013-2014.

In 2003-2004 the export is recorded as Rs 595 crores and there is a continuous increase in the export of handicraft products till 2006-2007. In 2007-08 the handicraft sector was badly affected and the export is Rs. -41.42 crores. In 2009-10 the export still is in negative i.e., –Rs. 6.27 Crore and then in 2011-12 highest export is being observed .The export of handicrafts goods in 2013-14 stands at Rs. 1695.65 crores. The above Table 2 is also plotted on the below pie-charts which shows the Year wise percentage change in export and Percentage contribution of each product including other goods also.

Export Carpets Woolen shawls Paper Machie Other items Total Percentage change in Export
2003-04 334.00 196.00 10.50 54.50 595.00 _____
2004-05 307.50 210.00 17.50 107.00 642.00 7.89
2005-06 325.00 220.00 27.50 132.50 705.00 9.81
2006-07 351.50 275.00 31.50 127.00 785.00 11.34
2007-08 649.02 310.29 33.65 207.51 1200.47 52.92
2008-09 326.00 226.50 41.00 112.00 705.50 -41.32
2009-10 407.73 137.13 30.27 86.14 661.27 -6.27
2010-11 412.25 302.00 66.50 223.15 1004.10 51.84
2011-12 567.13 607.03 98.24 370.97 1643.37 63.66
2012-13 455.86 620.02 104.11 358.29 1538.28 6.39
2013-14 551.9 579.72 39.96 524.07 1695.65 10.23
Percentage contribution 41.94 32.96 41.48 20.60 100  


Table 2:Export of handicrafts goods in J&K crores.


It is quite clear from the above pie charts (Figures 2 and 3) that there is a continuous increase in export of different products from 2004-05 (7.89%) till 2007-2008 (52.92%). In 2008-2009 there is sudden decrease in export which is -41.32% and -6.27% in 2009-2010. The reason for this negative export is because of the peak turmoil in Kashmir in these two subsequent years. The tourist arrivals also remained very poor in these two years thus impacted badly to the economy of Kashmir and created huge losses to all sectors of the Kashmir. In 2010-11there is an abrupt increase in the export of handicraft goods i.e., 51.84% thus recovered the previous loss. The highest export was recorded in the year 2011-12 which is 63.66% thus enhanced the foreign exchange earnings of the economy.

The highest contribution towards export is of carpet goods (41.94%) followed by Paper Machie (41.48%). Woolen Shawls contributed 92.96% and the other products like Gabba making, Wood carving, Namdha etc. records lowest contribution which is only 20.6%.

Number of Handicraft Establishments and Employment Thereof in Central Kashmir

The number of handicraft establishments and Employment in central Kashmir is analyzed below:

Number of establishments in Central Kashmir: The number of establishments in these three districts has been calculated out of total establishments of 507372 located at lengths and breadths of Jammu & Kashmir State. The number of establishments in central Kashmir as given below is the aggregate of all types of establishments i.e., outside households with fixed structure and inside households. The total number of establishments in central Kashmir is 132404 as shown in Table 3 below.

The above Table 3 reveals that Srinagar performs the lead with highest establishments of 70174 in central Kashmir. It is followed by district Badgam with 48232 establishments and district Ganderbal at Rank 3rd with 13998 establishments. The total percentage of these three districts is indicated in the below pie chart.

As is evident from the above table that the percentage to total establishments is highest in District Srinagar comprising 53%; contrarily, District Badgam comprises 36% followed by District Ganderbal with contribution of 11% has the lowest share to total establishments (Figure 4). District Srinagar comprises highest percentage because of the reason that Srinagar is the biggest district among these three districts and is the summer capital of the Jammu and Kashmir state.


Figure 2: Percent exchange in export.


Figure 3: Percentage contribution of each product.

Number of Establishments in Central Kashmir              (Figures in absolute numbers)
Districts Total Establishments Percentage
Srinagar 70174 53
Badgam 48232 36.42
Ganderbal 13998 10.58
Total 132404 100

Table 3: Number of establishments in Central Kashmir.

Employment: Handicrafts sector have a strong base for employment generation in J&K. A large number of literates as well as illiterates are dependent on this sector. The total number of workers in 507372 establishments is 1084295 throughout the state consisting of 594090 (55%) hired and 490205 (45.21%) not hired workers. The male workers are 81.34% and the female workers are 18.66% in the state. The employment of handicrafts sector in central Kashmir is broadly given below which includes hired with male-female workers and not hired with male-female workers also (Table 4).

Districts Hired Not Hired Total Percentage
Male Female Total Male Female Total   Male Female Total
Srinagar 70915 17792 88707 65044 7284 72328 135959 25076 161035 58.11
Badgam 23695 8420 32115 44070 16583 60653 67765 25003 92768 33.47
Ganderbal 10901 2126 13027 9669 604 10273 20570 2730 23300 8.4
Total 105511 28338 133849 118783 24471 143254 224294 52809 277103 100
Percentage contribution 38.07 10.22 48.3 42.86 8.9 51.7 80.95 19.5 100  

Table 4: Distribution of workers in establishments of handicrafts sector in Central Kashmir.


Figure 4: Percentage of total establishments.


Figure 5: Distribution of workers in establishments of handicrafts sector in Central Kashmir.

Considering the distribution of workers in central Kashmir, Srinagar is rated as the first topper district sharing 161035 (58.11%) workers out of total number of 277103 workers from these three districts. Furthermore district Srinagar is followed by district Badgam with 92768 (33.47%) workers and the lowest number of workers is in Ganderbal district with only 2730 (8.40%) workers.

As is evident from the above figure that Not Hired Workers (51.7%) are more comprising 42.86% males and 8.9% females as against hired workers (42.86%) comprising 38.07% males and 10.22% females. It is noticed here there the male are leading in both hired and not hired type of workers than females (Figure 5). The not hired workers are more because of the reason of unemployment and thus in orders to give up the unemployment the workers are more involved with handicrafts sectors.

Various Schemes of the Government

There are various schemes launched by the centre/state government for the promotion and prosperity of the handicrafts sector and are briefly discussed below:-

• Artisan Credit Card (ACC) Scheme: Indian Banks Association (IBA) launched a scheme to provide timely and adequately credit to the artesian women. Both the rural and urban entrepreneurs can take the advantage of this scheme.

Research and Development Scheme (R&D): This scheme is mainly to address the problems which the artisan’s faces related to common facilities, raw material, design, working conditions etc.

Design and Technology Up gradation Scheme (DTUS): This scheme includes viz. National Award for outstanding contribution in Handicrafts sector, Financial assistance for institutions to be set up under State Initiatives including Design Centre’s, Design Banks and Museums, Documentation, preservation and revival of rare and languishing crafts, National Award for outstanding contribution in Handicrafts sector etc. This scheme was launched with the objective to provide innovative skill to the artisans.

Dastkar Finance: This scheme is to provide credit to the artisans to setup their own establishments. This scheme provides 905 loan from banks and envisages 10% promoters contribution and available for craftsmen engaged in different types of handicrafts work, Artisans and members of cooperative societies.

Export Promotion Scheme: This scheme is intended to promote export of Handicrafts.

Human Resources Development Scheme (HRD): This scheme aims to provide training facilities to the artisans for the promotion of handicrafts sector.

Pension scheme: The objective of this scheme is to provide life insurance, financial assistance and health benefits to handicrafts artisans between the age group of 16-60 years.

The Problems of Handicrafts Sector of Jammu and Kashmir and Strategies/Suggestions thereof

Despite having the availability of several schemes for the promotion of handicrafts sector there are still number of problems associated with the handicrafts sector of Jammu and Kashmir. The main problems faced by the handicrafts sector and strategies/suggestions to be adopted to mitigate these chronic problems are briefly discussed below:-

⣠Infrastructure problem is the main problem faced by the handicrafts sector of J&K. It is the main barrier which hinders the development of this sector. So in order to mitigate this problem adequate infrastructure is the need of an hour.

â£Lack of Financial literacy is the other crucial problem being faced by the entrepreneurs of J&K handicrafts sector. Financial literacy means the ability and knowledge to understand personal finance and it encompasses an understanding of how to use savings, credit, investments, borrowings and expenditure. So, the best strategy to cope up this problem is to promote and enhance the financial literacy among the local masses.

â£The packaging is the main determinant to attract the customers. The buyers buying behaviors is largely affected by the packaging of the product. Thus in order to increase the growth of handicrafts sector the attractive packaging strategy should be adopted.

â£The problem linked with handicrafts sector is the use of obsolete tools and equipments. So, the government should intervene and address this problem and should make the availability of innovative technology.

Scarcity of Skilled workers is the crucial problem. Training programs is the remedy and learning by doing approach is the strategy to be adopted by the entrepreneurs. Support capacity building of businesses and civil society organizations through relevant training and systematic information-sharing so that they will be have the skills needed to engage substantively with international organizations.

⣠Lack of exposure to attract foreign investors. So, government should develop investment strategies to attract foreign players especially in this sector.

⣠The products should be manufactured in accordance to the Global Style.

⣠Besides having various credit schemes, high cost of credit hampers the entrepreneurs to setup their own establishments. The best ploy to overcome this problem liberal credit policy and easy terms and conditions should be implemented to ensure adequate financing.

⣠The entrepreneurs of the handicrafts sector must be adopt the strategy to make active participation in the fairs and exhibitions at national as well at international level.

⣠Political problems of Kashmir too is the crucial problem being encountered by the business sector of J&K, so political stability should be maintained on an immediate basis.

⣠Low remuneration is the annoying factor responsible for low performance of handicrafts sector. So the best strategy to be adopted is provide better remuneration to the work as well as provide incentives to motivate the workers and uniformity should be maintained for the same amount of work.


The main findings of the study are as under:-

• While analyzing the yearly growth rate of production and exports in the handicraft sector with 2003 as a base year it has been observed that the handicraft industry has shown a tremendous overall growth rate. There has been a substantial increase in the production sector from 1.46 percent in 2005 to 69.95 percent in 2007. Accordingly the export sector has shown considerable increase in the growth rates from 7.89 percent in 2004 to 52.92 percent in 2007.

• The production and exports in 2007 and in 2008 decreased significantly and was badly affected due to the turmoil in Kashmir.

• An important fact which is revealed from the present study is that the highest contribution towards production from 2003 to 2014 is of carpet goods which show a continuous growth from Rs. 450.53 crores in 2003-04 to Rs. 684.05 crores in 2013-14.

• The export of carpets is highest than any other product which accounts the export of 41.94% from 2003-04 to 2013-2014.

• It was found from the above study that in Central Kashmir the highest numbers of establishments are in District Srinagar i.e., 53% as against Dictrict Badgam (36.42%) and District Ganderbal (10.58%).

• It was also found that District Srinagar comes at the first rank in employment from handicrafts sector comprising 58.11% against District Badgam (33.47%) and District Ganderbal (8.40%).

• The employment potential of handicrafts sector is high because of its low capital investment.

• It is worth to mention here that this sector still faces several problems which must be addressed by the government on immediate basis.


The handicrafts sector of Kashmir is unique in its richness and beauty. In spite of the increasing influence of modernity and mechanization, the artistry and skill of hand-made artifacts of Jammu & Kashmir (J&K) continue to receive world-wide acclaim. Handicrafts activities occupy an important position in the economic structure of J&K State. The handicrafts activities are best suited to the state as these activities are more labour intensive and less capital intensive in nature, therefore having scope for employment generation opportunities at large scale. Seeing the overall scenario and performance of the state in the handicraft products, it is indeed a pride for the state which has been able to maintain growth and development in the sector especially in terms of export thus it occupies an important position in the international market.


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