Union Govt considers debt waiver scheme for handloom weavers

03 Sep '08

2 min read

The Agriculture sector was fortunate to have been granted the debt waiver scheme but now it has company. The Central Government is now planning to provide the handloom weavers with a similar scheme.

On the occasion of the launch of a textile expo organized by the National Handloom Development Corp Ltd (NHDC), Mr Shankarsinh Vaghela, Textile Minister stated, “We are in the final stages of discussions to execute the scheme”.

Although the previous estimate for a debt waiver stood at Rs12 billion, it has been revised at Rs20 billion by the textile ministry and has also been approved by the National Bank for Agriculture and Rural Development (Nabard).

However, the State Government, which would have to bear 20 percent of the aggregate burden, will also have to be consulted before executing the scheme.

The handloom sector recorded an increase of 7.01 percent in 2006-07 over 2005-06, with a production of 6,536 million square meters of textiles. Although growth rate slowed down marginally, it still managed to register a surge of 6.2 percent in 2007-08 with production standing at 6,944 million square metres.

The sector is in dire need of this financial back-up to increase production and tap foreign markets. Already, increasing competition from neighboring countries is eroding the profits of these poor weavers and to top it up, rapidly increasing interest rates for loans is making it impossible for the industry to draw capital from national banks.

However, if the debt waiver gets an approval, it would prove to be of great help to the industry in general and weavers in particular.

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