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Textile ministry increases corpus fund for yarn banks
Apr '17
Textile ministry's decision to increase the corpus fund for yarn banks in Surat to Rs 2 crore from Rs 1 crore will help powerloom weavers in the city to procure yarn for polyester fabric at concessional rates. Under Power Tex India, a Central government package scheme for powerloom, the ministry also reduced bank guarantee from 50 per cent to 25 per cent.

Two yarn bank in powerloom clusters of Pandesara and Ved Road were sanctioned by the Central government about two years ago. Pandesara Weavers Co-operative Society and Ved Road Art Silk Small Scale Co-operative Federation, two special purpose vehicles (SPV), were also formed by the textiles ministry. The initial corpus fund for these yarn banks was Rs 1 crore.

The yarn banks in Surat were started with an aim to purchase yarn from the open market and sell them to member weavers for a concessional rate. They keep price fluctuations in check and also allow weavers to purchase yarn on credit and pay in instalments. The banks also bring yarn samples from around the world so that the domestic industry can carry out their research and bring out innovative products.

There are over 1 lakh weavers in Pandesara and Ved Road clusters, however, the yarn bank was initially only able to cater to about 100 units, an official from Ved Road Art Silk Small Scale Co-operative Federation told a leading daily. These banks procure yarn from frontline spinners in bulk quantity at discounted rates.

The ministry of textiles announced the yarn bank scheme under Power Tex India with an objective of providing interest free corpus fund to SPV/Consortium to enable them to purchase yarn at wholesale rate and give the yarn at reasonable price to the small weavers. It aims to avoid middle man/local supplier’s brokerage charge on sales of yarn.

Registered co-operative societies, trusts, companies set-up under the Companies Act, 1956 as amended and firms set-up under the Limited Liability Partnership Act, 2008 as amended will benefit from this scheme. (KD)

Fibre2Fashion News Desk – India

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