Handlooms may get 25% capital subsidy

NEW DELHI: The handloom sector may soon get about 25% capital subsidy. The textile ministry has formulated a Technology Upgradation Fund Scheme (TUFS) for the sector, similar to the existing package for the powerloom sector.

“A capital subsidy package for the handloom sector is likely to be announced on July 31, ‘06. The proposed subsidy is expected to impart momentum to the growth of the handloom sector,” an official in the textile ministry said.

This development comes after the finance ministry recently agreed to release additional funds to continue TUFS. Apart from this scheme, the government is also planning to build 100 mini-clusters at an estimated investment of Rs 50 crore, he said. These clusters will help handloom weavers in designing, packaging and marketing products like dhotis, silk sarees, bedsheets and furnishings.

“The TUFS initiative in addition to textile ministry’s cluster development approach will boost production as well as consumption of handloom products. It may also be instrumental in increasing exports,” he said. The handloom sector, which accounts for 13% of total textile production, exports goods worth Rs 2,500 crore.

Experts believe that the overall funds required under this scheme will be much lower for the handloom sector compared to the powerloom sector as handloom is relatively less capital-intensive.

Not only this, the government is also planning a branding exercise for handloom and handicraft products. It plans to convert handicraft products with niche appeal into clearly identifiable Indian brands with global appeal. These products include carpets, tribal art, needle work, fashion accessories, jewellery and footwear.

The TUFS scheme will come in handy in preparing ground for production of such quality products. The ministry has also launched its Handloom Mark to maintain basic quality standard.