Ministry of Textiles calls meeting of states to implement various reforms

These reforms would be setting up of TEX Fund, powerloom upgrade, subsidised loans through weaver credit card

The Ministry of Textiles has called a high-level meeting of all state governments  to discuss new schemes and modification in existing schemes in the textile sector .

Many issues are likely  to feature in this meeting  ranging from setting up of pilot TEX fund,   upgradation of plain powerlooms,High level meeting  with textile minister, setting up of mega cluster projects, issue of weaver credit card (WCC) and health insurance scheme among others.

As the proposal underway, 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, said officials. 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. To achieve the target of issuance of WCC, the ministry 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.

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