Handloom weavers to get credit card, interest subsidyNovember 19th, 2011 - 9:42 pm ICT by IANS
New Delhi, Nov 19 (IANS) Commerce and Industry and Textiles Minister Anand Sharma Saturday announced measures such as issuance of weaver credit card, interest subsidy, credit guarantee and freight reimbursement for handloom weavers as part of the handloom package.
“A meeting of Expenditure Finance Committee (EFC) was held Friday and a decision of covering individual weavers also, a large number of whom are from UP (Uttar Pradesh), will be sent for consideration of the cabinet,” said a statement from the commerce and industry ministry.
“While the loan waiver package cover the needs of loan defaulters, but the large number of individual weavers who are facing stress economic conditions also need support. A six-fold strategy has been prepared as part of the handloom package,” it added.
The weavers credit card will be issued to individual weavers who will be able to access loans upto Rs.2 lakh and generally in the range of Rs.35,000 to Rs.50,000 for a period of 3 years without any collateral security.
The scheme has been finalised and the banks would be advised for its implementation.
Owing to the unduly high cost of credit, the government has recommended interest subsidy of 3 percent to enable weavers to access loan at 7-8 percent interest for 3 years.
Assistance of Rs.4,200-Rs.5,400 per weaver has also been proposed which will provide them leverage for borrowing loans. This will be besides a credit guarantee under which loans extended by banks will be guaranteed by the credit guarantee fund trust for medium and small enterprises to the extent of 85 percent of their outstandings.
Price subsidy is proposed for yarn supplied by the National Handloom Development Corporation and agencies proposed by the state governments in order to overcome the problem of yarn supply.
In the budget for the current financial year, the government had announced a loan waiver package of Rs.3,000 crore, which was expected to benefit 15,000 handloom weaver cooperative societies and 3 lakh handloom weavers, who had been unable to repay their loan on account of economic difficulties.
However, a large number of weavers of Uttar Pradesh, who operate on an individual basis and are not organised in the cooperative sector, were left out of its ambit.
In recent times, this sector has come under stress on account of high yarn prices and stiff competition from power loom and mill sector. Apart from this, even access to credit is not easily forthcoming.
The bulk of handloom industry weavers are from Uttar Pradesh, West Bengal, Orissa, the northeastern states and the southern belt, and a large number of them belong to the minority community or are women.
“A focused attention to this sector i, an imperative from the stand point of our ‘inclusive growth agenda,” the statement added.
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Tags: anand sharma, collateral security, credit card interest, credit guarantee, crore, economic conditions, efc, finance committee, guarantee fund, industry ministry, interest subsidy, lakh, loan defaulters, price subsidy, rs 2, rs 50, state governments, waiver package, weavers, yarn