National Handloom Development Programme (NHDP)

Handloom sector in India has a large potential to bring in more revenue and employment opportunities to the nation. To enhance and standardise the handloom industry, the Government of India has been launching several programmes and schemes. The National Handloom Development Programme (NHDP) is revised and implemented to follow create an integrated and holistic development of handlooms and welfare of the handloom weavers. The scheme at supporting the handloom weavers, Self Help Groups, NGOs and other handloom co-operative societies for the procurement of raw materials, technological upgradation and marketing of their handloom products.

Objective of the Programme

The programme is revised and implemented with the following objectives:

To improve the socio-economic status of the 43 Lakhs weavers and its allied workers in the country.
To generate more employment opportunities for the backward and minority people.
To enhance the production and meet the demand of the handloom products in the national and international markets.
To systemise and organise the handloom sector through proper supply chain management.
To bridge the gap in the sector and enable the supply chain management through infrastructure enhancement, innovative technologies and product development as per the market need.
To increase the compensation of the handloom products for the weavers.

Key components of the scheme

Block Level Cluster projects

The cluster development methodology focuses on the formation of weavers' groups as a formidable unit that can be self-viable. The cluster will be set up for handlooms. More than one cluster could be taken up depending upon need with respect to a number of handlooms. The Principles followed in the selection of cluster are emphasised accordingly with each cluster in the SLPC minutes.

Substantial financial assistance in the launch of new Clusters

The financial support for a new cluster is based upon the need and the demand, the dependency of the requirement, the managerial capacity of the Block Level Cluster Organisation. On the whole, the Government of India provides whopping financial support of Rs.2 crore per cluster.

General Awareness
BaselineSurvey - The baseline survey requires an official visit to every weaver of the cluster for organising the profile of the cluster in regards with the:

- Number of active handlooms
- Type of handlooms
- Community-based number of weavers under the General or SC or ST or OBC or Minority etc. category
- Type of yarn used, product range, Average weaver income etc.
Diagnostic Study - Diagnosis Study of the cluster is the first move towards implementing the action plan by identifying the assets and flaws, ecosystem that the cluster works in and the tactical steps needed for an effective output.

The key objective of the diagnosis is to comprehend and evaluate the current scenario under which the handlooms are working in the cluster in regards to the:

Analysis of business operations
Nature of production activity
Profiling of products
Patterns of production and
Existing market potential for it

Formation of consortium - The Formation consortium formed by the stakeholder from the Self Help Groups (SHGs), Co-operative Societies, Master weavers, Private Entrepreneurs, NGOs etc. The objective is to work allied with the weavers and tie up linkages with the connected organisations like:

Banks and Financial institutions
Market institutions and marketing experts
Marketers, legal experts, Government machineries, weavers etc.

Product Development – Product Development works with the principle of producing cost-effective, time-saving, innovative handloom products that stand tall in the market

Payment of Administrative cost to designated agency underHathkargha Samvardhan Sahayata
- An Administrative cost should be paid to the designated agency (NHDC) for the transfer of funds through DBT in beneficiaries account towards the purchase of looms, dobby, jacquards etc. as per the guidelines of Hathkargha Samvardhan Sahayata (HSS).
- The designated agency, i.e., NHDC etc. will be paid a service charge @1.25%-2% of the Government of India share on the lines of Yarn Supply Scheme.

Handloom Marketing Assistance

The objective of the handloom marketing assistance is to develop and promote the marketing channels in the domestic and export market by linking the two in a holistic and integrated manner. The handloom marketing assistance components will have the following sub-components:

Domestic Marketing Promotion

The sub-component Domestic Marketing Promotion covers all the marketing activities such as Organisation of expos, events, and craft melas. The registered users of the handloom mark can take part in the expos which are held in the 14 metropolitan cities in the country.

Marketing Infrastructure Development

The sub-component aims at establishing urban haats with the estimated area of 8000 Sq.Mts in all the cities to encourage the export of handloom products and display the samples and the finished products at one place. The Office of the Development Commissioner for Handlooms and the State Government allocates and shares the fund of Rs.3 Crores required for the establishment of urban haats.

Market Access Initiative

The sub-component work towards engaging the handloom workers in a traditionally known handloom cluster to expand the handloom products. The handloom weavers are also offered apprenticeship programs and trained to market their handloom products in the Fashion Design Council and build a marketing linkage for their products. The Central Government has allocated a total fund of Rs.1 Crore per cluster to implement the sub-component across the country.

Handloom Export Promotion

The sub-component aims at identifying and assisting the handloom societies and corporation to export their products through participation in the international trade fairs and take part in the buyer-seller meets.

Concessional Credit

The Component aims at providing credit facilities to the handloom weavers at concessional interest rates. The sub-component of the components are as follows:

Interest Subsidy - The sub-component aims at offering subsidised loan at a reduced rate of 6% to the handloom weavers for the period of three years.
Margin Money Assistance - Handloom weavers, self-help groups and joint liability groups are offered a quantum of Rs.10000 per weaver and leverage this amount for borrowing loans from the banks.
Credit Guarantee - The loans released by the banks to the handloom weavers are guaranteed by the Credit Guarantee Fund Trust for Medium and Small Enterprises (CGTMSE). The annual fee for the credit guarantee service is paid by the Government of India effective from the date of disbursement of loan from the bank for a duration of 3 years.
Bunker facilitator - The Banks are authorised to engage Bunkar Facilitator for the collection and preliminary processing of loan application. These facilitators are keen about the completeness of the project, submission of an application to the bank branch and post-sanction monitoring till disbursement of the loan. The Government of India reimburses an incentive of 0.5% of the loan amount disbursed by the bank, subjected to a minimum of 200 and a maximum of Rs.2000 per loan for onward payment to the Bunkar Facilitator.
Handloom Census: Third-party handloom census and its data are concerning the following factors are carried out for obtaining the modernised data on handloom sector with the issuance of Identity Cards to handloom weavers and allied workers.