Although the villagers see it as a gamble, there is already evidence that it works. A community-owned company promoted a year ago in Jodhpur with a paid-up capital of Rs 34 lakh (Rs 3.4 million) is valued at Rs 1.10 crore (Rs 11 million) . The company, which totted up sales of Rs 5.7 crore (Rs 57 million) and a profit after tax of Rs 22 lakh (Rs 2.2 million) in its first year, has 2,300 artisan shareholders.

Each of their Rs 100 shares is worth about Rs 300. As many of them hold 10 shares each, their investment of Rs 1,000 has tripled to Rs 3,000, an escalation they couldn't have dreamed of. Through a complicated internal trading system, an artisan can - if he wishes - recover his investment.

Chanderi and Jodhpur are just the beginning. So far 18 community-owned companies have been set up with 6,000 artisan shareholders. Fabindia hopes to set up 100 such companies by dividing its supplier base into clusters. Eventually, the 100 companies will cover 100,000 artisans across 21 states.

Image: Artisans at work. | Photograph: Rouf Bhat/AFP/Getty Images