Govt rescues India handloom sector from recession

Under this Financial Package, provisions have been made for handloom cooperative societies and individual handloom weavers to obtain fresh loans after by waiver with interest subsidy of 3% for a period of 3 years and with credit guarantee.

NABARD is the implementing agency of the financial package for loan waiver. 21 State Governments have signed MoU towards effecting legal and institutional reforms and providing state share and have made budgetary provision in their State budget towards State share amounting to Rs. 349.03 crore.

Out of 43 Apex and 15765 functional primary societies, NABARD has completed special audit of 19 Apex and 5451 primary societies. Loan waiver and recapitalization amount assessed by special audit so far is Rs. 132.27 crore for Apex and Rs. 225.88 crore for primary cooperative societies.

In addition, various SIMRCs have also assessed a sum of Rs. 72.18 crore for 38805 individual weavers and 2,399 Self Help Group. NABARD has sanctioned a sum of Rs. 220.68 crore for loan waiver, out of which Rs. 147.70 crore has been released by NABARD as loan waiver and recapitalization.

The second package is a Comprehensive package to provide cheap credit and subsidized yarn to all other handloom weavers and their cooperative societies. For easy credit availability to handloom weavers, the Government is providing Margin money assistance @ Rs. 4200 per weaver to individual weavers, their self help groups and joint liability groups, interest subvention of 3% per annum for 3 years and credit guarantee also for 3 years by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

Till 3oth November, 2012, 13,772 WCC have been issued, loan amounting to Rs. 49.15 Crore have been sanctioned and Rs. 22.8 crore has been disbursed. The Government will pay the required guarantee fee and annual service fee. For yarn at reasonable prices, the Government has approved 10% price subsidy on silk and cotton hank yarn.

Under 10% price subsidy, till 30th November 2012 1, 03,626 yarn pass books have been issued and yarn valuing Rs.149.3 crore has been supplied. The Government has also enhanced the freight reimbursement under Mill Gate Price Scheme for transportation of different types of yarn used by the handloom sector in order to offset the increase in fuel cost, in order to ensure availability of subsidized yarn in the handloom clusters in far flung areas of the country. 

Ministry of Textiles