Since the establishment of the first paper mill in 1832, the paper industry has been a pampered and protected one. The government has consistently helped industry exploit the country's forests and rural poor by supplying raw materials at unrealistically low prices. In 1981-82 for instance, the paper industry paid the Madhya Pradesh forest department Rs 0.54 for a length of bamboo, while the forest dweller paid a little over Rs 2.00 for it. But the fast-depleting forest cover has now led to a severe raw material crunch, leading to a revival of a long-standing demand from industry for captive plantations on state-owned forest land.

Industry leaders say the shortage of raw material is the biggest threat to the paper industry but few are willing to acknowledge their relative lack of initiative in promoting what can become a virtually inexhaustible source of wood for the industry and a good source of revenue for the farmers