The Centre on Saturday announced a Rs. 6,234 crore package for 13 lakh weavers. In Uttar Pradesh, the package will benefit debt-hit 2 lakh weavers, whose case Congress general secretary Rahul Gandhi had taken up with Union Commerce and Industry Minister Anand Sharma.
To be implemented from January 2012, the package includes a Rs.3,884-crore debt waiver and Rs.2,350 crore for a six-fold strategy to uplift weavers during the 12th Five Year Plan. “The scheme will help 15,000 weavers' cooperative societies, besides individual weavers. An individual weaver will get a benefit up to Rs. 50,000,” Mr. Sharma told journalists here.
Pointing out that the decision was taken on Friday at a meeting of the Expenditure Finance Committee in the Capital, Mr. Sharma said: “In August, weavers had come to Delhi seeking help… the Union Finance Minister had also announced a Rs.3,000-crore loan waiver for the handloom weavers in his budget speech of 2011-12.”
Rahul's letter
However, a large number of individual weavers in Uttar Pradesh, which goes to polls next year, were left out of the scheme that was to mainly benefit cooperative societies. During his recent visit to the weavers' belt in eastern Uttar Pradesh, Congress general secretary Rahul Gandhi wrote to Mr. Sharma seeking a special package for the handloom sector that has come under stress due to stiff competition and credit unavailability. Mr. Sharma said a decision for covering individual weavers, a large number of whom are from Uttar Pradesh, will be sent for consideration to the Cabinet.
Under the six-fold strategy, weavers' credit cards will be issued to eligible individual weavers who will be able to access loans up to Rs.2 lakh — generally in the range of Rs.35,000 to Rs.50,000 — for three years without any collateral security.
Interest subsidy
“The scheme has been finalised and the banks will be advised for its implementation. We have recommended an interest subsidy of 3 per cent to enable weavers to access loans at 7-8 per cent interest for three years,” the Minister said. Over 43 lakh weavers, mainly Muslims, are confined to Uttar Pradesh, West Bengal, Odisha, Assam and some southern States.
Under the package, an assistance of Rs.4,200-Rs.5,400 per weaver has been proposed, that will provide them leverage for borrowing loans; loans extended by banks will be guaranteed by the Credit Guarantee Fund Trust for medium and small enterprises to the extent of 85 per cent of their outstanding. A price subsidy of 10 per cent 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.
