Ministry of Textiles calls for high level meeting of all state government to discuss new and existing textile schemes

YarnsandFibers News Bureau 2014-09-26 15:50:00 – New Delhi

A high-level meeting of all state governments will be held with textile minister to discuss new schemes and modification in existing schemes in the textile sector. Many issues are likely to feature in this high level meeting.

A pilot Scheme of "TEX Fund" is to be set across states as a dedicated fund with a corpus of minimum Rs 35 crore for investing primarily in companies engaged in manufacturing and services activities in the powerloom industry and allied products / services. The fund will be managed by SIDBI Venture Capital Limited (Investment Manager), a wholly-owned subsidiary of the Small Industries Development Bank of India (SIDBI) under an umbrella trust that will be set up by SIDBI.

The fund, with investment limited to contributors/ beneficiaries would have a corpus of Rs 80 crore and would invest in the equity of companies to boost their net-worth, leverage commercial bank debt, improve their manufacturing capacity and sales turnover, increase competitiveness and profitability.

New products and technologies or innovative business model which have the potential to bring superior value proposition to the customers will be given preference. Companies undertaking expansions which already have sound financial performance are also encompassed in the scope of the fund.

Offcials stated that the objective of the scheme is to provide financial assistance to economically weaker low-end powerloom units where the benefit of the Technological Upgradation fund scheme (TUFS) has not reached and to improve quality and productivity of the fabric. Preference would be given to those units having maximum two to four looms in household units and/or within one shed among the eligible units.

At present the scheme is applicable to the clusters i.e Sircilla (Telangana), Bhagalpur (Bihar), Burhanpur (MadhyaPradesh), Tanda & Mau (Uttar Pradesh), Malegaon, Ichalkaranji, Nagpur (Maharashtra).

Besides, there is a scheme for in-situ Upgrading of plain powerlooms where subsidy to the extent of 50% of the cost of the upgradation subject to maximum of Rs 15,000 per loom is provided to the powerloom units (maximum of eight looms per weaver).

However, official sources stated that it is observed that powerloom weavers are not coming forward to avail of the benefit under the Scheme probably for the reason that they are unable to bear the 50 per cent cost. To this extent, the government of Maharashtra had announced financial assistance of Rs 10,000 per loom to the powerloom weavers. While, the scheme is proposed to be extended to six more clusters, viz. Bhiwandi, Surat, Ahmedabad, Somanur, Ludhiana & Kishangarh including the above-mentioned ones, feedback is to be taken from states on their indivisual efforts.

The government also proposes to set up four mega cluster projects at Bareilly, Lucknow, Kutch and for other crafts of J&K.

Besides, the government has set a target of issuance of two lakh WCCs and credit mobilisation of Rs 1,200 crore for handloom sector for financial Year 2014-15. While the state-wise target for WCC has already been communicated to State Governments and NABARD, the progress of issuance of WCC is not satisfactory and only around 14,500 WCCs have been issued till August,14, said officials.

The ministry to achieve the target of issuance of WCC will discuss the action plan with the states to decide district wise target and make the issuance of WCC as regular agenda of review at highest level, to organise camps in coordination with banks for disposal of pending applications as well as to collect fresh applications for issuance of WCC among other things to expedite the issuance.

Another agenda is implementation of Health Insurance Scheme (HIS) under the Rashtriya Swasthya Bima Yojana (RSBY) platform in the 12th Plan

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