Revival package to boost India's handloom sector

The Government sponsored “Revival, Reform & Restructuring of the Handloom Sector” scheme is set to boost the ailing handloom secor in India.

“The basic purpose of the package is revival of the handloom sector in the country and declogging the chocked lines of bank credit to viable/potentially viable weaver’s cooperative societies (WCS) and to the individual weavers,” Mr. P Mohanaiah, Chief General Manager, NABARD, Andhra Pradesh Regional Office, Hyderabad, told fibre2fashion.

Explaining further, he says, “The recapitalization assistance will facilitate increasing the borrowing power of the Primary WCS (PWCS) and enable them to enlarge their client base.”

The scheme envisages that the lending institutions would provide liberal assistance under Interest Subvention Scheme to the weavers, who wish to take fresh loan and start weaving related activities.

“In the long run, this will benefit WCS as well as individual weavers, as their credit needs would be met by the lending institution to a large extent,” avers Mr. Mohanaiah.

The total outlay of the scheme is Rs. 38.84 billion, which includes recapitalization assistance to viable and potentially viable Apex WCS (AWCS) and PWCS. The share of Central and state governments would be in the ratio of 75:25 for AWCS and 80:20 for PWCS, individual weavers and self-help groups (SHGs).

The scheme also covers direct loans to individual weavers, SHGs, joint liability groups (JLGs) and master weavers by all banks.

Under the scheme, financial assistance will be provided to handloom WCS and handloom weavers by waiver of working capital and/or term loans of individual weavers, SHGs, JLGs and master weavers. The scheme will cover direct loans by the lending institutions subject to a maximum overdue amount of Rs. 50,000 per individual.

The scheme is being implemented as a new Centrally Sponsored Plan Scheme with a total outlay of Rs. 38.84 billion, with the Government of India contributing Rs. 31.37 billion and the remaining Rs. 7.47 billion to be contributed by the state governments.

The implementation of the package is to be completed by December 31, 2012.

Fibre2fashion News Desk - India