To uplift the handloom industry, Government has introduced many schemes. Fibre2fashion highlights the Government Schemes and its effectiveness.

Government Schemes for the upliftment of the Handlooms Industry

The Ministry of Textiles announced the following five Schemes in the 11th Five year plan by merging the different Schemes of 10th Five year plan.

Office of the Development Commissioner for Handlooms New Delhi headed by Shri B.K. Sinha, IAS, Development Commissioner for Handlooms, functioning under the Ministry of Textiles, administers these five schemes for the Promotion and Development of the Handloom Sector and also provides assistance to the Handloom Weavers in 4 varieties of ways. Its subordinate organizations include Weavers' Service Centre (WSCs), Indian Institute of Handloom Technology (IIHTs) and the Regional Office of the DCH (Enforcement Wing)

Following are the abstracts of the five schemes of 11th Five year plan. The complete details can be obtained from

Five Schemes of 11th Five Year Plan

  1. Integrated Handlooms Development Scheme (IHDS)
  2. Mill Gate price scheme.
  3. Handloom Weavers Welfare Scheme.
  4. Marketing and Export promotion Scheme.
  5. Diversified Handloom Development Scheme.

1. Integrated Handlooms Development Scheme (IHDS)

  • To form Handloom Weavers Groups.
  • To assist weavers for becoming self Sustainable.
  • To cover weavers within and outside the Co-op. fold.
  • To upgrade the skills of the Handloom Weavers.
  • To provide suitable work place to the weavers.
  • To orient Marketing, Designing and managing the production.
  • To facilitate credit from Banks.
  • To encourage Co-operative actions of weavers.
  • To intervene each cluster with specific holistic and flexible manner.
  • This Scheme comprises of four parts.


Cluster Development Programme (Assistance for Handloom cluster, having Handlooms in the range of 300-500).


"Group Approach" for Development of Handlooms.


Financial Assistance to the Handloom Organizations.


Assistance for Innovative ideas and publicity monitoring, Supervision, Training & Evaluation of Scheme.

  • 20 clusters were taken-up in Phase-I
  • 332 clusters were taken-up in Phase-II & Phase-III

2. Mill Gate Price Scheme

  • The scheme was introduced in 1992-93.
  • National Handloom Development Corporation (NHDC) is the Agency authorized to implement the scheme.
  • The scheme benefits - All Handloom organizations of National/State/Regional/Primary level and NGOs
  • All types of yarn required for production of Handloom items are covered under the scheme.
  • NHDC arrange the yarn from the mills at mill gate price to the godown of the agencies.
  • Reimbursement to the user agencies: Freight charges-1%; Depot operating expenses 2.5%; Service charges paid to NHDC- 1.5%.
  • 383 yarn Depots were setup in 2006-07. 375 Lakh. kgs. of yarn was supplied during 2006-07.

3. Handloom Weavers Welfare Scheme

  • This Scheme Comprises of two parts namely :

A.      Health Insurance Scheme.

B.      Mahatma Gandhi Bunkar Bima Yojana Schemes (MGBBY)

Health Insurance Scheme (HIS)

  • The scheme was introduced in Nov, 2005.
  • It is implemented in collaboration with ICICI Lombard General Insurance Company.
  • It enables weavers to access the best health care facilities.
  • The scheme covers the weaver, his / her spouse and two children.
  • The annual limit per family is Rs.15,000/- of which the provision for OPD is Rs.7,500/-
  • The annual premium per weaver is Rs.781.60 of which RS.642.47 is contributed by GOI and Rs.139.13 by the weaver or Minimum Rs.50 by the Weavers and Rs.89.13 by State Govt.
  • 4.57 lakhs weavers were covered during 2006-07.

Mahatma Gandhi Bunkar Bima Yojana Schemes (MGBBY)

  • The scheme was launched on October 2, 2005.
  • The scheme is implemented in collaboration with Life Insurance Corporation of India Ltd. (LIC).
  • The scheme covers Natural as well as Accidental death.
  • The sum assured for Natural death is Rs.60,000/- per weaver, for accidental death is Rs.1,50,000 for total Disability is Rs.1,50,000/- and for Partial Disability is Rs.75.000/-
  • The Annual premium is Rs.330 per weaver (Rs.80 weaver + Rs.150 GOI + Rs.100 LIC)
  • Rs.1200/- per child per year (Maximum for 2 Children) is given for education.
  • 6.0 lakh Weavers were covered during 2006-07.

4. Marketing and Export Promotion Scheme

  • This Scheme comprises of two parts :

A.      Market Promotion Scheme.

B.      Export Promotion Scheme.

Market Promotion Scheme:

  • To assist in the sale of handloom products, by organizing exhibitions at National Level, Regional Level, State Level, and District Level.
  • To facilitate the consumer to purchase genuine handloom products under one umbrella.
  • To provide group merchandising under one roof.
  • National Handloom Expo, Special Expo, District Level Events, Craft mela, Urban Hatts, setting up of marketing complex, Publicity and Awareness, Geographical Indications act., Handloom Mark.- These components are under Market Promotion Scheme.

Export Promotion Scheme:

  • To identify and assist suitable Apex/Primary Handloom Co-op. Societies and Corporation in developing the products that are Export - worthy.
  • Market penetration through participation in International Exhibitions, and Buyer-Seller Meets.
  • Export project, International Fairs and Exhibitions, Setting up of Design Studios, and Promotional Events. These components are under Export Promotion Scheme.

5. Diversified Handloom Development Scheme

  • This scheme provides Technological up-gradation through a variety of programmes which cover skill up-gradation of weavers, Development of Designs and Product Development.
  • Strengthening of

A.      Weavers Service Centre, (WSC).

B.      Indian Institute of Handloom Technology (IIHTs).

C.      National Centre for Textile Designs (NCTD).

  • Research and Development.
  • Jammu & Kashmir Wool project and Weavers Service Centre.
  • Setting up of New IIHTs.
  • Starting Handloom Census and issuing Identify Cards to Handloom Weavers.

To check effectiveness of these schemes Fibre2fashion exclusively spoke with Mr. Ramachandrappa. T. N. - Cluster Development Executive -IHCDP, GADAG. As per him "The schemes of DC (H) in the 11th plan are really beneficial to handloom weavers. As per our 2 years experience in handling the scheme of Integrated Handloom Development Programme scheme, as a Cluster Development Executive, it is useful to handloom weavers coming under Corporate Body, Cooperative Societies, Master Weavers, Self-Help Group & also individual weavers as follows:

  1. By issue of handloom accessories directly to weavers on subsedised rates, the quality of the product & productivity improved and also increased the wage earnings to the extent of 5%.
  2. By depositing of Corpus Fund with NHDC, the Raw Material Depot is functioning and the weavers are getting the good quality of yarn on mill-gate price.
  3. Under the Product Development Activity, developing new designs as per market trend and after diversifying new designs, the weavers are getting more earnings, and also creating brand image.
  4. Establishment of Common Facility Centre:  The weavers of the cluster area will get the benefit of common facility centre, where testing lab, R & D section, Dye House are functioning.
  5. Under the Marketing Activity, awareness of national level market trend, creating the brand image of the products produced by the weavers of cluster, by which weavers will get continuous weaving work with higher margin.

In addition to the above, we have implemented such type of other activities related to development of handloom weavers in our cluster."

He also shares the steps taken to educate the weavers about welfare schemes "By conducting the awareness workshop to the weavers and cluster actors, and conducting baseline survey in detail, preparing the action plan on the basis of baseline survey, the scheme is implemented."