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Integrated Scheme for Powerloom Sector Development

Integrated Scheme for Powerloom Sector Development

Integrated Scheme for Powerloom Sector Development

The Powerloom Industry in India has formed a prime segment in the Textile community. The powerloom was technically inherited from the handloom sector and are considered as the successor to the handlooms sector. This formed a clustered and decentralised sector that paved the way for either a small or big powerloom sectors in almost every part of the country. This article speaks about the infrastructural and financial benefits of Powerloom sector that charged on to implementing the Integrated Scheme for the Powerloom Sector’s Development.

Powerloom and its Features

The greater proportionate in the requirement of fabric for the garment sector for both domestic and international markets had set the demand of the powerloom sector. The Government statistics report that the powerloom sector covered 62% of the total fabric production. The Government has focused its attention on the powerloom sector with the implementation of multi-pronged Schemes and interventions.

To address and overcome the drawbacks faced by the powerloom weavers in their socio-economic status, to enrich the technology standards of the powerloom weavers, the Integrated Schemes are established. The Government of India initiated the beneficial process with the Integrated Scheme for Powerloom Sector Development under the XII Five Year Plan, citing its rising demand and economic value.

Objectives of the Scheme

The main objectives of the scheme and the purpose of the scheme are as follows:

  • To upgrade the Powerloom Sector with modern methods.
  • To provide efficient support and service to the powerloom industry weavers through Powerloom Service Centres (PCs) by providing the latest technological machines and equipment.
  • To assist and encourage the powerloom weavers or industry in marketing their products by conducting exhibitions.
  • To dilute the involvement of the brokers and middlemen between the Organizations.
  • To provide infrastructure support for marketing and promotions for both in domestic and international markets.
  • To provide assistance in establishing Common Facility Centres (CFCs) and Yarn Bank in Clusters for direct marketing.
  • To encourage the powerloom industry to meet global challenges and competition independently.
  • To provide start-up capital for powerloom weavers on account of Tex-Venture Capital Funds.

Scope of the Scheme

The Powerloom sector has reached nook, and corner of the nation with every state has at least a small cluster. To diversify the powerloom products, the 12th Year plan focuses largely on the modernization and marketing methods of the garment sector. The Scheme comprises of the following components:

  1. To conduct seminars or workshops for the powerloom weavers educating them about the scheme, the technological evolution in the sector and the benefits of the scheme for their own.
  2. Marketing Development Programs for Powerloom are organised for the powerloom weavers to market their products at regional and cluster level.
  3. The Grant-In-Aid (GIA) is Non-Plan Funds utilised for recurring the day-to-day expense of PSCs.
  4. Powerloom Service Centres (PSCs) and Integrated Textile Service Centres (ITSCs) are established to create facilities in the areas of the following:
    • Design and development for entrepreneur and weaver’s development.
    • Quality Testing
    • Skilled manpower
    • Providing efficient tools and machinery
    • Government assists in the modernisation of existing PCS.

Procedure for Forming Special Purpose Vehicle

The following are the conditions that are involved in the implementation of the scheme:

  • Special Purpose Vehicle (SPV) or a Consortium are eligible for submitting proposals in setting-up Facilities centre like Yarn Depot.
  • SPV should be a democratic firm with a vision of increasing and developing the individual powerloom weavers or entrepreneurs in future.
  • Project Approval Committee (PAC) will approve the submitted proposal considering the facilities available in the surrounding area.
  • The SPV will submit the financial progress report and project completion report to the Textile Commissioner.
  • The minimum of eleven members are necessary to form an SPV, and they should be:
  • Stakeholders,
  • Co-operative Societies,
  • Master Weavers,
  • Private Entrepreneurs,
  • NGOs working for the powerloom sector.
  • Operative Society,
  • A trust or an organisation registered under the Companies Act, 1956.

Documents to Submit

The following are the requisites to be followed by an SPV in submitting a claim proposal:

  1. SPV should furnish all the information about the cluster regarding the,
    • Location
    • Complete Details of Special Purpose Values
    • Bank Details of SPV
    • Name of the Products
    • Total No. of Micro and Small Enterprises and its cluster categories as below:
      • Micro
      • Small
      • Owned by the Women enterprises
      • Owned by SC
      • Owned by ST
      • Owned by minorities
      • Entire turnover of the cluster
      • Major grievances of the cluster
    • Key interventions in terms of Technology Improvement, product quality, Marketing, Export
    • Details of the organisation that has assessed, evaluated, diagnosed the study of clusters.
  1. SPV should submit the list of Common Facility Centres
  • To specify the need, benefits and on what factors do the common facilities are framed.
  • The other established interventions of the Government/Association if any
  • The details of other enterprises showing interest in the Common Facilities Centres.
  • Details of the in-principle approval form the bank.
  • Submitting the Report of the machinery and its installation
  • Regularly preparing the monthly Management Information System reports
  • Final approval by the 60% utilisation if the CFC certificates.

3. SPV should submit the detailed project report comprising all the elements.

The following are the components/facts involved for claiming the assistance:

  • List of Plant and Machineries
  • 100% capacity utilisation on the consumables annually
  • Utilisation and services at full capacity utilisation, in terms of power, water, gas and oil.
  • Location of the Plan, Site and details of civil Non Affirmative certification.
  • Organization of Manpower requirement
  • Complete project cost estimation and details.
  • The scheduled means of finance for construction and production.

Funding Pattern

The Government of India provides support for the setting up of Common Facilities Centres, including Yarn Bank with three different levels:

  • Grade–A, this level of assistance is provided up to 60% of the project cost.
  • Grade–B, this assistance is provided up to 70% of the project cost.
  • Grade–C, this level of assistance is provided up to 80% of the project cost.
  • Grade–D, this level of assistance is provided up to 90% of the project cost for the clusters in North Eastern Regions and Jammu and Kashmir.

The Grading of the clusters is done by the Textile Commissioner, and the project cost for the assistance will include:

  • The damage incurred for the Machinery, plant, tools, equipment, other assets, preliminary expenses.
  • One-fourth of the building’s construction cost.
  • The Government will not provide assistance for the land cost, and the SPV holds the responsibility of providing the land.

Fund Release

The financial transaction of SPV will be organised with an escrow account, which will be operated jointly by one member of SPV and Regional Office. An approval by the Project Approval committee upon the fund release claim will be submitted to the Textile Commissioner by PSV for initiating the fund release. The financial assistance will be released with a prior Physical certification Report issued by the Local Level Monitoring Committee (LLMC).

The Government of India releases the fund to SPV in the following instalments:

  • 1st instalment, 30% of the total GOI share is distributed for construction of the building
  • 2nd instalment, 30% of the GOI share is released on submission of the utilisation Certificate approved by the LLMC over the expense and the 60% of construction completion.
  • 3rd & final instalment of 40% of the GOI share is released after the successful construction completion of the building and its certification by LLMC.
  • Assistance for the machinery and equipment are released after LLMC certified on its procurement, installation and commissioning.