Millennium Post

The oldest pillar of Indian economy

The oldest pillar of Indian economy
The handloom industry has a unique place in India’s economy, providing employemnt to close to 65 lakh people who are engaged in weaving and allied activities. It has been sustained by transferring skills from one generation to another. The strength of the sector lies in its uniqueness, adaptability, innovations, flexibility, adaptability to the suppliers’ requirement and the wealth of its tradition.

The strength of handloom sector lies in the production of intricate woven fabric and quality, which are widely recognised all over the world. The availability of highly skilled labour  and scope for  technology upgradation and  innovation make this sector all the more lucrative for the rural India.
The vast domestic market and untapped potential provide greater opportunites for this sector to expand.   Also, due to the unique design and of the products, the handloom sector  enjoys the luxury of charging premium price for its products from the niche market.

Despite its own charm and the increasing demand of the products in foreign countries, the handloom industry is suffering from myriad affairs. Number of looms and weavers in the country are declining in the country due to the stiff competition from the mills and powerloom sector.

Handlooms offer low productivity against the powerloom. The serious constraint of availability of credit is stifling the growth of  the sector. Poor weavers are often caught in the clutches of informal sources of credit like master weavers, mahajans etc. Inadequate market intelligence and facilities also pose a major problem for them.

In view of all the problems faced by the sector, government has been taking all the necessary steps to preserve our traditional industry.  In order to provide  input support, NHDC has been set up to access raw materials. Concessional credit is being made available to  weavers through banks. Weavers Service Centres (WSCs) have been set up throughout the country to impart the training of skill development. WSCs also provide design support to them.

The development of six mega clusters, 20 large clusters and 612 small clusters provides the infrastructure support.   Welfare measures like health and life insurance are also made available to  the weavers. To ensure credit flow to the sector, a number of revival and  comprehensive packages for loan waiver are given from time to time to the sector. The export of handloom products is increasing, and days worked per weaver per annum has increased.

This trend indicates that value addition is increasingly taking place, quality of handloom products is consistently improving, more weavers are adopting full time profession, Many SPVs/SHGs along with individual weavers have started exporting directly, and many high end retailers are marketing handloom products.

The strength of the handloom sector is production of intricate woven fabric (its versatility and quality is widely recognised all over the world), diverse design base; quick to switch over to new designs, availability of highly skilled labour, traditional mode of production with low technology, scope for technology upgradation and innovation, and Eco-friendly technology and process.

There are oportunities for the handloom sector in the vast domestic and international market. The modes of government intervention are input support, access to raw materials through NHDC, concessional institutional credit through banks, skill development through training by WSCs, design support through WSCs & designers of clusters, marketing and brand building through domestic and international exhibitions, handloom mark etc, welfare measures like  recapitalisation of primary/apex societies as well as ensuring credit flows to this sector.

The means of protecting the handloom sector are Handlooms (Reservation of Articles for Production) Act, to protect the livelihood of millions of handloom weavers from encroachment of the power loom and mill sector on items reserved for exclusive production on handlooms, hank yarn obligation to ensure yarn availability under the provision of the EC Act, spinning mills to pack 40 per cent of yarn produced for civil delivery into hank form, Geographical Indication of Goods( Registration & Protection) Act, 1999, to provide legal protection to geographical indications of goods and prevent unauthorised use by others, and assistance to register 35 items under the act.

 The planned schemes are National Handloom Development Programme (NHDP), Comprehensive Handloom Development Scheme, Cluster Development Programme, handloom marketing assistance, development and strengthening of handloom institutions, Revival, Reform and Restructuring (RRR) Package, Yarn Supply Scheme, Handloom Weavers’ Comprehensive Welfare Scheme, Health Insurance Scheme, and Mahatma Gandhi Bunkar Bima Yojna.

The main components of the Cluster Development programme are  consolidation of clusters, new clusters, group approach projects, and marketing incentives.

Another means is consolidation of clusters sanctioned during 11th plan to fill the gaps. Twenty clusters with 3,000-5,000 looms with a project cost Rs 2 crore were taken up as pilot project under IHCDS. Six hundred and ten small clusters were sanctioned during the 11th plan. During the 12th plan, new clusters with 200-500 handlooms (Rs  60.00 lakh/ cluster) and clusters having 2,000 to 5,000 looms (Rs 150 lakh/ cluster) will be taken up, with a project duration of four years. Financial assistance is being provided for baseline surveys, diagnostic studies, formation of SHGs/ consortium, corpus fund for yarn depot, engagement of designer, CPC/ dye house, skill up-gradation, and construction of worksheds. Groups are taken up outside the clusters with an average site of 10 -50 weavers per group with an average financial assistance of Rs 30,000 per weaver. The total number of group approach projects sanctioned during 11th plan is 2,248.  Financial assistance is also being provided towards skill and technology upgradation and construction of worksheds.  The Handfoom Marketing Assistance Scheme has two components — Marketing Promotion and Handloom Export Promotion.

The new activities introduced in the 12th plan  are web portal for online marketing, engagement of leading designers for design intervention in major cluster/ handloom production centres, setting up of CFC-cum-display units at Panipat and Karur and engagement of a brand ambassador.

Handloom institutions are being developed and strengthened through strengthening of weavers service centers (WSCs)/ IIHTs, setting up of new WSCs/ IIHTs, providing assistance to the state to set up IIHTs in the state sector, bringing innovation in design and handloom technology, revival and documentation of traditional designs, upgrade od skills of weavers through training programmes/ workshops to equip them to meet the market requirements. At present 25 WSCs and six IIHTs are functioning and three new WSCs are to be opened in Jharkhand, Mizoram and Nagaland. The notification for WSC Ranchi has been issued and the handloom census is being conducted.

There is also a Revival, Reform and Restructuring (RRR) package for the handloom sector for waiver of overdue loans (100 per cent principal and 25 per cent of interest) as on 31 March, 2010.  On 24 November, 2011, the CCEA approved that banks would waive 75 per cent interest with commitment on fresh financing. Fresh finance supported by interest subvention at the rate of 3 per cent for three yars and credit guarantee for three years has been approved. This covers 25 apex, 4073 PWC societies, 50403 individual weavers and 5462 SHGs and the total loan waiver amount approved is Rs 514.82 crore. No PWC societies could be benefitted in Bihar, Maharashtra, Manipur, Uttarakhand, Haryana, Punjab and fewer number of PWC societies were covered in Odisha, Rajasthan and Madhya Pradesh.

On the requests of states and to provide coverage to a large number of PWC societies, the government approved a modified RRR package on 23 September, 2013, with relaxed eligibility norms and fresh finance to the handloom sector at 6 per cent.

Up to 31 December, 2012, loan waiver and recapitalisation assistance of seven apex, 4732 PWC societies amounting to Rs 505.25 crore has been approved. To complete the statutory audit in some states, an extension in  the  date of implementation by another two months, i.e up to 28 February, 2014, has been further approved.

The government approved an institutional credit component under IHDS on 18 December, 2011, which provided for a Weavers’ Credit Card (WCC) for availing credit, credit guarantee for three years, interest subvention of 3 per cent for three years, and margin money assistance at the ate of Rs 4,200 per weaver. During 2012-13, 53,628 WCCs were issued and Rs 172 crore loans sanctioned. In the Budget for 2013-14, Finance Minister P Chidambaram announced loans to handloom sector at 6 per cent. A concessional credit component under the RRR package was approved on 23 September, 2013.

The concessional credit component provides Weavers’ Credit Card (WCC) for availing credit, loans at 6 per cent interest with maximum interest subvention by GOI capped at 7 per cent  for three years, margin money assistance at the rate of 20 per cent of loans sanctioned (limited to Rs 10,000 per weaver), credit guarantee for three years, and provision for banks to engage bunkar facilitator (BF), and IEC activities.
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