Introduction:

Tamil Nadu was the 3rd largest industrial state in the country. The gross output of its industrial sector was Rs.37,986 crores, accounting for 10.3% of the national output. Handloom industry in Tamil Nadu plays an important role in improving economic conditions of the rural poor by providing employment about 65 lakh people are directly or indirectly employed in the Handloom Sector as weavers and allied workers. Tamil Nadu has identified 22 locations for establishing handloom clusters with financial assistance from the Centre.

The average annual production of handloom cloth in the State is about 2500 lakh metres, of which, contribution made by handloom cooperatives is around 1200 lakh meters. Average annual sales of handloom cloth are Rs.1500 crore, of which, the sales by handloom cooperatives accounts for Rs.700 crore. The average annual export of handloom cloth by Tamil Nadu is Rs.600 crore, of which export sales by Handloom cooperatives through Merchant Export is around Rs.260 crore.

In the context of opening up of global textiles market, the approach of the Government is to 'sustain the handloom industry' and 'continue to provide livelihood to the Lakhs of weavers who depend on this activity'. This requires constant skill upgradation to produce marketable products, technology upgradation to increase the productivity and to maintain quality to compete in the world market besides product diversification through continuous design interventions. All the above measures will ensure sustenance of the industry.

A provision of Rs.256 crores has been made for this scheme. In order to continue the scheme for providing free power to handloom and powerloom weavers, as announced by this Government in the previous calendar year, a provison of Rs.78 crores has been made in this Budget. This initiative would benefit 1,50,000 handloom and 80,000 powerloom weavers. The monthly pension given to handloom weavers above 60 years of age will be doubled from Rs.200 to Rs.400 per month. The Government will bear the additional expenditure. This scheme will benefit about 13,000 handloom weavers currently receiving pension.

With a view to increasing the income of weavers, the Government is implementing a scheme to boost the sales of handloom cloth by introducing new designs in collaboration with the National Institute of Design at Ahmedabad. With a view to producing adequate quantity of silk yarn necessary for silk weaving within the state itself, an additional 10,000 acres of land will be brought under Mulberry cultivation in 2007-2008. Sericulture Development Project will be implemented at an estimated cost of Rs.15 crores with central assistance.

HANDLOOM DEVELOPMENT SCHEMES

In order to develop the handloom sector, the Government has developed such schemes, they are;

1Rebate Subsidy Scheme

Considering the handloom sector and its inbuilt disadvantages with regard to price of its products, rebate subsidy assistance is granted by the State Government. This is an indirect way of protecting the handloom sector from severe competition and also to safeguard the handloom weavers from the onslaught of market recession for handloom goods.


The State Government permitted the primary weavers co-operative societies and Co-optex to allow rebate at the rate of 20% for the sale of handloom cloth. As per the policy of the State Government, the excess expenditure over and above the Government of India's contribution under Marketing Incentive component of the Deendayal Hathkargha Protsahan Yojana Scheme will be borne by the State Government.

For implementation of this Scheme, a provision of Rs.102 crore has been made in the Revised Budget for the year 2006-07.

2Deendayal Hathkargha Protsahan Yojana Scheme

Deen Dayal Hathkargha Protsahan Yojana Scheme is a comprehensive scheme for handlooms sector formulated by the Government of India, which has been implemented with effect from 1.4.2000. The funding pattern of the scheme is on sharing basis between Centre and State Governments in the ratio of 50:50.

The financial assistance provided under various components of the scheme is as follows:

A.Basic Inputs

Financial assistance in the form of Margin Money at the rate of Rs.4000/- per weaver shall be provided. A grant of Rs.2,000/- for purchase of new looms, Rs.1500/-. for dobby, Rs.2000/- for jacquard and Rs.1000/- for other accessories will also be provided.

B.Infrastructure Support

Financial assistance for infrastructure support will be extended to Primary Weavers' Cooperative Societies for setting up of Water and Effluent Treatment Plants, setting up of Common Facility Centres to carry out warping, pre and postloom operations, etc.

C.Design Input

State Level Handloom Organizations /Apex Societies having turnover of more than Rs.5.00 crore and Primary Societies with turnover of more than Rs.25.00 lakh in the preceding year will be eligible to get one time assistance in the form of grant of Rs.5.00 lakh per institution for provision of designs and installation of Computer Aided Design system to improve the design quality of the products.

The Primary Weavers Cooperative Societies are also eligible to get one time assistance in the form of grant of Rs.1.00 lakh to avail of the services of National Institute of Design, National Institute of Fashion Technology, Weavers Service Centre, etc.

D.Publicity

Financial assistance in the form of grant subject to a maximum of Rs.5.00 lakh per institution will be provided for projects involving expenditure towards Publicity, Advertisement, Printing of brochures/catalogues, market research and market surveys/studies as well as production of films for promotion of sales of handlooms.

E.Strengthening of Handloom Organizations

Financial assistance will be provided towards financial restructuring of State Handloom Corporations and Apex Weavers Cooperative Societies / Federations with a view to making them viable by enhancing their credit limit / Working capital, etc.

Under this Scheme, a provision of Rs.1190.01 lakh has been made in the Revised Budget for the year 2006-07.


3Free distribution of Sarees and Dhoties Scheme

This Scheme provides continuous employment to about 11,000 handloom weavers and 23,000 powerloom weavers, but also fulfills the clothing needs of 3.28 crore poor people in Tamil Nadu. The Sarees and Dhoties required for the scheme will be produced and supplied by the Handloom and Powerloom Weavers Cooperative Societies in the State.

Towards implementation of Free Distribution of Sarees and Dhoties Scheme for Pongal 2007, a provision of Rs.273.00 crore has been made in the Revised Budget for the year 2006-07.

4Free distribution of Uniform Scheme

The Scheme of Free Supply of Uniforms to School Children studying in std. I to VIII covered under Nutritious Noon Meal Programme is being implemented by the State Government from the year 1985-86 and the cloth required for the scheme is being produced by the Weavers' Co-operative Societies.

Towards implementation of this Scheme, a provision of Rs.40.00 crore has been made in the Revised Budget for the year 2006-07.

5Working Capital at concessional rate of interest to Handloom Weavers Cooperative Societies and Co-optex

Financial assistance at concessional rate of interest was provided by Tamil Nadu State Apex Cooperative Bank and the District Central Cooperative Banks under NABARD Refinance Scheme. The Primary Weavers' Cooperative Societies are being provided with Working Capital finance at normal rate of interest.

The total Cash Credit limits sanctioned by the NABARD both to the Primary Weavers' Cooperative Societies and Tamil Nadu Handloom Weavers' Cooperative Society (Co-optex) for the year 2006-2007 is Rs.315.51 crore.

The per-loom scale of finance for working capital fixed by NABARD for 2006-2007 is as follows:--

6Prize Award Scheme for the Best Exporters

To encourage the export trade in handloom cloth and to widen their market in foreign countries, the Government of Tamil Nadu have been implementing the scheme to Award Prizes to the Best Exporters in Tamil Nadu. This scheme is being implemented from 1975 onwards.

In order to encourage export production among primary weavers' co-operative societies, the Government have been sanctioning a sum of Rs.50,000/- every year towards the implementation of this scheme. Under this scheme, Trophies and Certificates to the best exporters including primary weavers co-operative societies are distributed.

7Prize Award Scheme for Best Weavers for New Designs

To encourage handloom weavers for developing new designs, the Government is implementing Prize Award Scheme. Every year, the best talented weavers who have developed new designs are awarded prizes as follows:

FIRST PRIZE- Rs.5,000/-
SECOND PRIZE- Rs.3,000/-
THIRD PRIZE- Rs.2,000/-

This scheme will encourage the societies to introduce new designs so as to produce marketable/ exportable varieties. The expenditure under this scheme is being met out from the Cooperative Research and Development Fund of the Tamil Nadu Co-operative Union.

8Integrated Handloom Cluster Development Programme

The Government of India have formulated a new scheme called Integrated Handloom Cluster Development Programme for the overall development of handloom clusters. Under this scheme, assistance is being provided for various components such as upgradation, modification, purchase of looms and accessories, setting up of Dyeing Units, common facility centers, opening of showrooms, conducting of exhibitions/fairs, publicity, providing of design inputs etc. The maximum assistance for each cluster will be Rs.200.00 lakh. By way of implementation of this programme, the overall socio-economic status of the Handloom weavers of the clusters is expected to improve.

The Government of Tamil Nadu have selected Tiruvannamalai, Trichy and Kurinjipadi clusters for implementation of this programme and the same has been approved by the Government of India also. Based on the approvals given, steps are being taken to implement the Programmes in the above 3 Handloom Clusters viz. Tiruvannamalai, Trichy and Kurinjipadi.

9Handlooms (Reservation of Articles for Production) Act, 1985

To protect handloom weavers and the handloom industry from the onslaught of powerlooms, the Government of India have enacted HANDLOOMS (RESERVATION OF ARTICLES FOR PRODUCTION) ACT, 1985 for implementation by all the States in the country. The Government of India have reserved 11 items exclusively for production in handlooms. To implement the Handlooms Reservation Act effectively, separate Enforcement Machinery in Tamil Nadu has been formed with a Deputy Director at Head Quarters, Chennai and 5 Field level offices.

HANDLOOMS AND TEXTILES POLICY - 2005 - 2006

Tamilnadu has played a key role towards achieving the growth of Textile Industry in India. Spinning, Handloom, Powerloom and Garment are the four pillars of the Textile Sector in the State.
The objective and activities of the Department of Handlooms and Textiles is to promote the harmonious growth of Handloom, Powerloom and Textile Sectors and to work for the welfare of the handloom weavers.

Handloom industry in Tamilnadu plays an important role in improving economic conditions of the rural poor by providing employment for more than 4.29 lakh weaver households and about 11.64 lakh weavers. In Tamilnadu, 2.11 lakh handlooms are functioning in 1247 handloom weavers co-operative societies as on 28.02.2005 and the remaining looms are outside the co-operative fold. Out of 1247 handloom weavers co-operative societies, 1169 are cotton weavers co-operative societies and the remaining 78 are silk weavers co-operative societies. The handloom weavers co-operative societies mostly exist in Rural and Semi-Urban areas, where there is large concentration of handloom weavers. All the Development and welfare schemes implemented by the Government of Tamilnadu and Government of India are channalised through the weavers co-operative societies.


The handloom weavers co-operative societies have produced 1083.26 lakh metres of Handloom cloth valued at Rs.559.72 crore and sold handloom goods to the extent of Rs.696.58 crore during the year 2004-05 (upto 28.02.2005). There is an increase of sale of handloom cloth worth Rs.121.97 crore in 2004-05(upto 28.02.2005) over the sales made during the year 2003-04. The number of handloom weavers co-operative societies working on profit has been increased from 527 during the year 2003-2004 to 601 during the year 2004-2005(upto 28.02.2005). Marketing is the major factor for the performance of the handloom weavers co-operative societies. To capture the consumer market, production of marketable / exportable varieties have been encouraged by the Department and suitable action plan have been given to the handloom weavers co-operative societies depending upon the market trend, so as to increase the sales. It has been programmed to adopt new marketing strategies by infusing more number of designs during the year 2005-06, so as to improve the sale of handloom fabrics.

With a view to provide continuous employment to the powerloom weavers, it has been programmed to produce marketable varieties in the powerloom weavers co-operative societies and suitable action plan has been given to the powerloom weavers co-operative.

SCHEME FOR HANDLOOM EXPORT DEVELOPMENT

Export of handloom has identified as a Thrust Area for the overall development of the sector. The Government is exploring the possibility of making optimal use of the resources to enhance production capabilities of exportable products.

In order to give substantial impetus to the export of handloom fabric, made-ups and other handloom items from the country, a scheme for Development of Exportable Products and their Marketing was introduced during 1996-97. Under the scheme, the assistance is available for developing exportable products, building up production capability for export and thereafter marketing it.

National and State level Handloom Corporations, Apex Cooperative societies, Primary Cooperative societies and Handloom Cooperative Societies affiliated to /registered and sponsored by Councils/Corporations, Handloom Export Promotion Council, Association of Corporations and Apex Societies of Handlooms, Handicrafts and Handloom Export Corporation, Indian Silk Export Promotion Council, National Handloom Development Corporation etc. are eligible for assistance under this scheme. Private handloom exporters can also be assisted through HEPC.

The project cost in respect of the agency sponsored by the State Governments is shared by the State Government itself or by the beneficiary agency. The agencies sponsored by Central Government like HEPC, HHEC, NHDC, ACASH etc. are entitled to 100% assistance from the Government of India under the scheme.


HANDLOOM EXPORT ZONES IN TAMILNADU

Five handloom export zones (HEZs) are being established in Tamil Nadu as part of initiatives to promote exports in the sector, the state government would provide infrastructure and land for this, the Centre would provide Rs 60 lakh for each of the clusters. The HEZs will come up in Nagercoil, Virudhunagar, Kancheepuram, Tiruvannamalai and Nagapattinam. The first zone would be commissioned in Nagercoil by October this year.

"The HEZs would provide new focus for export of handloom and more jobs domestically.
One new studio to improve designing are being established at Karur.

Next year onwards a separate classification code for handloom, which would make it easy and convenient to generate data of handloom exports.

HANDLOOM MARKETS

The market for handloom products is four-tiered:

__The self-consumption sector where handlooms are made for household requirements and not for sale, as in the northeast of India.
__The rural market where weavers do the marketing themselves.
__The distant domestic market, largely urban, and which is beyond the reach of weavers.
__Export markets.

Master weavers and private traders market 90% of handloom products. The traders either retail these products through their own outlets or act as intermediaries supplying wholesalers or retailers. The bulk of exports are handled through merchant exporters and manufacturer-exporters, the former getting their supplies from manufacturers and master weavers, while the latter having their own production facilities.

FINANCIAL ASSISTANCE

Exclusively to assist weavers, the state govt, has started a corporation entitled �The Tamilnadu Handloom Development Corporation Ltd� This was a public sector undertaking started in the year1964 with a view to provide financial Assistance to the weavers outside the cooperative fold. Members of the corporation will be eligible to obtain loan for working capital purposes. The Branches of the Corporation situated at Salem, Madurai, Coimbatore, Kancheepuram, Cuddalore , Kumbakonam and Tirunelveli.

The members of the corporation alone are eligible to obtain loan from the Corporation. A member can obtain loan to the extent of ten times the amount of share capital invested by him. A member can also avail loan if he has ten shares and also deposits a margin money equivalent to ten times the amount of loan. The amount of loan up to a limit of Rs.1,00,000/-. This loan will be sanctioned for production , marketing and processing of Handloom, Powerloom and Hosiery cloth. The entire amount of loan will have to be repaid within a period of 18 months in two equal installments . Interest should be paid in every quarter. The rate of interest is 18.5%.If a member remits the installments of principal and interest promptly, he will be eligible for a rebate of 1%. For delayed remittance of Principal, penal interest will be levied.


STEPS TAKEN BY THE GOVERNMENT:

To improve the handloom sector, the Government has taken many steps.like,
1 Implementation of Free Distribution of Sarees and Dhoties Scheme :
2 Steps taken for increasing the sales and to reduce the stock of handloom goods
3 New Insurance Scheme for Handloom Weavers
4 Introduction of New Designs
5 Implementation of the Scheme of Free supply of Uniforms to School Children
6 Conduct of District Level Exhibitions
7 Exports by Weavers Co-operative Societies
8 Special Project Under Swarna Jayanthi Gram Swarozgar Yojana Scheme
9 Training to weavers for upgradation of skills and improving designs
10 Restructuring of Co-optex
11 Financial Assistance for implementation of Voluntary Retirement Scheme
12 Settlement of dues to District Central Co-operative Banks / State Bank of India
13 Textile Centre Infrastructure Development Scheme (Tcids)
14 Establishment of Apparel Parks
15 Establishment of Shutleless Powerloom Weaving Parks (Hi-Tech Park)

Conclusion:

Handloom sector plays an important role in improving economic condition. The Government of Tamil Nadu is liable to promote the industry. Thus, the Government has announced many schemes and developed many policies to develop the sector. The govt., providing adequate financial support through the institutions to the wavers. Apart from that, the govt. promoting new handloom export zones in Tamil Nadu. Concerned with Tamil Nadu the weaver as well as the handloom sector is well established.


ABOUT THE AUTHORS:

1. Dr. S. SUDALAIMUTHU

S.Sudalaimuthu
Lecturer
Department of commerce
Bharathiar University
Coimbatore 641046
E.mail:sm_vcas@yahoo.com

Field of Specializations:

Accounting, Financial Management, Banking, E-Commerce and Computer subjects (C , Visual Basic, MIS)

Achievements:

(1) Actively engaged in guiding M.Com, M.Phil and Ph.D students, M.Com Projects guided: 42, M.Phil Projects guided: 17, currently guiding 6 Ph.D and 5 M.Phil students.
(2) Seminar / Workshop organized in the College level: 33,State level: 2,National Level: 1
(3) Seminar / Workshop participated: 42,
(4) No of papers presented in the State level and National Level Seminar: 42,
(5) No of Papers presented in the International Seminar: 11
(6) No of papers published: 6,
(7) Developed many programs in C and Visual Basic for various commerce applications,
(8) Familiar in using Accounting Packages: Tally and EX-Next Generation,
(9) Designed and introduced five job oriented certificate courses in Vidya sagar college of Arts and Science, Udumalpet.,
(10) Teaching Experience: U.G - 16 years, PG - 11 years.

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2. B.SIVA KUMAR

I am B.Siva Kumar. M.Phil Research scholar of Bharathiar University, Coimbatore 641 046. I did my B.Com graduation in Sree Ramu College of Arts and Science, Pollachi, Coimbatore, Tamil Nadu, India and secured 61% of marks, M.Com in N.G.M. College of Arts and Science, Pollachi, Coimbatore, Tamil Nadu, India and secured 79% of marks. I have presented 6 papers in National and 3 papers in International Conference and attended many national and International seminars in and around Indian state.

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