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Govt introduces financial assistance schemes for powerlooms weavers

YarnsandFibers News Bureau 2017-11-29 10:00:00 – New Delhi

The government has introduced Pradhan Mantri Credit Scheme for powerloom weavers , under this scheme it will provide financial assistance of up to 90 percent. The government will provide margin money subsidy to the extent of 20 percent of the project cost, with a ceiling of Rs 1 lakh, as well as interest subvention at six percent per annum, both for working capital and term loans up to Rs 10 lakh for a maximum of five years.

Ujwal Lahoti, chairman, The Cotton Textiles Export Promotion Council said that another scheme for the ailing powerloom sector is Sustainable and Accelerated Adoption of Efficient Textile Technologies to help Small Industries, abbreviated as SAATHI. This is expected to benefit almost 2.5 million powerloom units, which produce 57 per cent of total cloth in the country. The use of efficient equipment would result in energy savings and cost savings to the unit owner, who would in turn repay in instalments to EESL (Energy Efficient Services Ltd) over a three to four-year period.

The schemes provide for powerloom units to not only upgrade technology but to install solar power equipment to cut energy costs.

Kavita Gupta, textile commissioner said that the Union ministry and state governments have announced several promotional schemes for powerloom textiles but there is hardly any awareness in the industry. The highest benefit of these schemes has been taken by entrepreneurs of Gujarat and Tamil Nadu.

The solar energy scheme for small powerloom units will help the unit to pay back bank loans within three to four years. After this initial repayment period, the unit shall get practically free electricity.

Lahoti welcoming the increase in the Merchandise Exports from India Scheme (MEIS) from two to four percent, urged the government to include cotton yarn under it. While every other segment in the textile value chain has been provided with MEIS benefits, cotton yarn has been excluded for some inexplicable reason, though it was included in the Focus Market Scheme and Incremental Export Incentive Scheme under the earlier Foreign Trade Policy.

He said that of the 2.5 million powerlooms, half are in Maharashtra. There are 108 powerloom clusters in the country and 72 textile parks.

Lahoti also said that more of cotton yarn export will benefit not only the spinning sector but also cotton farmers and the value-added segments of fabric and made-ups/garments.

However, at present the spinning sector is passing through difficult times and losing market share to Vietnam and Indonesia due to increasing costs. Withdrawal of export incentives for cotton yarn has reduced India’s competitive edge, as local prices have increased by five to six percent, is the complaint.

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