Special Package for Handloom Weavers

In his budget speech (2011-12), Union Finance Minister on 28.2.2011 had announced providing of Rs.3000 crore to NABARD, benefitting 15,000 cooperative societies and about 3 lakh handloom weavers.   Consequently, the Government has approved “Revival, Reform & Restructuring Package for Handloom Sector” having financial implication of Rs. 3884 crore on 24.11.2011. Of this Rs. 3884 crore, share of Government of India is Rs. 3137 crore and that of State Governments Rs. 747 crore. The Package covers loan waiver of 100% of principal and 25% of interest, which is overdue as on 31.03.2010 in respect of eligible individual handloom weavers and weavers cooperative societies.  Interest subsidy of 3% for 3 years is also extended with guarantee for the fresh loans sanctioned by the banks to individual weavers and the handloom cooperative societies covered by the loan waiver. The National Bank for Agriculture and Rural Development (NABARD) is the  implementing agency.

            The other handloom weavers, who are not benefited under the Revival, Reform & Restructuring Package, are provided financial assistance with subsidized credit, under the ‘Comprehensive Package for the Handloom Sector” with an outlay of Rs. 2362 crore.   This package addresses the twin needs of cheap credit and subsidized  yarn for this sector. Credit related interventions are operationalized through Integrated Handloom Development Scheme and these interventions are (i) Issuance of Weaver Credit Cards (ii) Interest Subvention @ 3% on fresh loan sanctioned for 3 years, (iii) Margin Money @ Rs.4200 per individual weaver (but  not for cooperative societies) and (iv) Credit Guarantee for 3 years.  The package also provides for supplying subsidized yarn with 10% price subsidy under Mill Gate Price Scheme with enhanced freight reimbursement rates to ensure that adequate cheap yarn is available to handloom sector in the country.

In addition to the above, five plan schemes of 11^th Plan are being continued during 2012-13 for the development of the handloom sector and welfare of handloom weavers. These are i) Integrated Handloom Development Scheme; ii) Handloom Weavers Comprehensive Welfare Scheme; iii) Marketing & Export Promotion Scheme; iv) Mill Gate Price Scheme; and) Diversified Handloom Development Scheme.