Sushma Ramchandran

Measures include improving credit availability, reducing interest rates on loans

The sector, providing 6.5 million jobs, is the second largest employer after agricultureExperts panel to map out financial status of industry proposed

New Delhi: At a high-level meeting here on Tuesday, Prime Minister Manmohan Singh outlined a package of measures to revive the handloom industry including improving credit availability, reducing interest rates and providing a social security net for weavers.

As a follow-up to the meeting, attended by Finance Minister P. Chidambaram, Textiles Minister Shankarsinh Vaghela, Commerce and Industry Minister Kamal Nath and Minister of State for Commerce Jairam Ramesh, a committee on easier credit delivery is expected to be formed.

The United Progressive Alliance Government is focussing on improving the financial health of the handloom sector as it provides 6.5 million jobs, making it the second largest employer after agriculturein the country. It is for this reason, sources say, both the Prime Minister and Congress president Sonia Gandhi have been repeatedly highlighting the critical role of the handloom industry in several public statements.

The Finance Ministry has been asked to consider whether the concessional rates of interest applicable to the farm sector can be extended to handloom weavers. It may also set up an experts committee to map out the financial status of the handloom industry as was done for the agriculture sector.

On the schemes announced in the last budget, Mr. Ramesh told The Hindu that the "cluster development" approach would continue and the possibility of a social security net for weavers was also being examined. A major project was likely to be undertaken to help them shift from pit looms to the modern, high productivity apparatus.

Mr. Ramesh recently released the report of an experts committee, which said the system of providing credit for the handloom sector had become "dysfunctional" and in many places had even become defunct. It called for bringing the debate on the status and health of the sector back on the national policy agenda.

Comprehensive survey

The study, carried out by the All-India Artisans and Craftworkers Welfare Association, says there is an urgent need for the Ministries concerned, along with the apex financial institution, National Bank for Agriculture and Rural Development (NABARD), to map the status of the handloom industry with reference to the financial aspects.

A situation assessment survey, similar to that carried out by the National Sample Survey Organisation of the agricultural sector in 2003, could be done. "It is high time that a similar comprehensive exercise was undertaken focussing on the business of handlooms and the financial dimensions of this business from the viewpoint of those engaged in it, namely the weavers," says the study.

Highlighting the need for a review of the credit delivery mechanisms, it says the NABARD, along with the Development Commissioner of Handlooms, should think afresh what kind of credit policies is needed for this sector. "The annual ritual of framing policies and sanctioning limits has ceased to add any significant value to the well-being of cooperatives."