CHAPTER 2

HANDLOOM INDUSTRY - A MACRO AND MICRO SCENARIO

Introduction

India a country of diversity, is famous for unity in its rich cultural

heritage. Handloom Industry forms part of the Indian culture and tradition

(Nageii C.Das 1986). Handloom is a household industry, spread

throughout the length and breadth of the country (Akuraihi }'enkati>swara

Rao 1973). In terms of contribution to economic development particularly

in rural India, handloom industry assumes significance next only to

Agriculture, At present about 15.6 million people are solely dependent

on handloom industry and another equal number in various associated

industries. The handloom fabrics' production has registered more than

ten-fold increase from a level of 500 million sq. metres in the early fifties

to 7862 million sq. metres in 1997-98. This sector contributes nearly 23

per cent of the total cloth production in the country (NCUI1999).

The need to promote handloom industry arises more on social

obligation than on economic advantage. For millions, handloom is not

only the economic necessity, but a way of life also. These socio­

economic and other reasons are in support of the Policy Planners.

Kanungo Committee (1954) wrote in its report "For a production of 3.5

times of the handloom industry, the mill industry provides direct

employment approximately to one sixth of the number of people

engaged in the handloom industry".

38

The employment potential in the handloom industry is therefore, nearly

20 times what it is in the mill industry, yard for yard." (Quoted in NClll

1993) . The International Labour Organisation (ILO) and the United

Nations Industrial Development Organisation (UNIDO) have assessed

socio- economic effects of eight alternate weaving technologies

(International Labour Organisation 1983). The evaluation reveals that

handloom weaving is the most attractive industry from the employment

point of view, and with respect to rural industrialisation. The Sivaraman

Committee observed that " every new powerloom thus puts out of action

six handlooms in the country" (Gover/unc/it of India 1974). Guided by these

revelations, the Government of India has been giving priority to this

sector in all its successive Five Year plans (First Five Year Plan

1951-56, Second Five Year Plan 1956-60, Third Five Year Plan

1961-66, Annual Plans 1967-1969, Fourth Five Year Plan 1969-74, Fifth

Five Year Planl974-79, Sixth Five Year Plan 1980-85, Seventh Five

Year Plan 1985-90, Eighth Five Year Plan 1990-95, and Ninth Five Year

Plan 1997-2002). The specific reasons for the promotion and protection

of the handloom sector are:

/- Though handloom is a small and tiny cottage industry, it is a

major industry in terms of employment potential, it provides

employment for 124 lakhs of people (Ninth Five Year Plan 1997-

2002). The significance of handloom industry in providing

employment could be understood more vividly from the fact that

39

57.80 per cent of the total population engaged in textile

production are in handloom sector while 23.31 and 18.89 per

cent are in powerloom and mill sector respectively {Annual Report

1999-2000). Hence the socio-economic cost of finding alternate

livelihood to these millions of people, is too great a risk to the

nation and thus unthinkable.

Moreover the capital required for handloom industry is lower than

any other small-scale industry. Handloom industry requires nearly

Rs.4, 000 as block capital and Rs. 3,000 as working capital.

Whereas a small scale industry requires on an average

Rs.30,000 and Rs.5, 000 as block capital and working capital

respectively. The total capital requirement of handloom is

Rs.7, 000 per loom while it is Rs.50, 000 per powerloom (Office of

the Assistant Director J998).

Closure of handloom industry may lead to a large-scale urban

migration (Hedge 1993).

Since agricultural land is more or less unexpandable, additional

employment can not be generated in the agriculture sector to a

great extent and labour intensive methods proved to be cost

ineffective (Anjaneyalu 1990). Handloom offers a non-land based

employment opportunity (Hedge 1993).

Since handloom can produce cloth in smaller batches, it provides

for the production of varied designs evolved through endless

innovations. Artistic handloom fabrics can not be produced

40

through machines. Thus it has greater potential to exploit export

markets than mill made fabrics.

r Moreover handloom offers job opportunities to women folk. About

63 per cent of the preparatory workers in handloom industry are

women (Hedge 1993).

> Handloom industry has no adverse ecological effect and also it

does not demand conventional energy, unlike industrial giants.

History and Development of Handloom Industry

History shows that handloom weaving was in existence in India

for over five thousand eight hundred years from now (Akuraihi

Yeiikaieswara Rao 1973). in Vedas and Puranas, there are innumerable

references to the exquisite qualities and wide range of fabrics worn by

Gods, kings and the people at large. The Ramayan refers to the 'fine

silken vestments in multi colours given as wedding gifts to Sita. In

Mahabharata it has been mentioned that Yudhisthira received clothes

woven from ' Thread spun by worms' as gift (Kapoor 1979).

From about 1500 B.C. to 1500 A.D for nearly thirty centuries,

India held the world monopoly in the manufacture of cotton goods

(Kuriyan 1970). In the laws of Manu, it has been mentioned that the

sacred threads worn by the Brahmin were made of cotton. Herodotus in

the fifth century of the Christian era speaks of Indian cotton in high

praise in the following words. "The Indians possess a kind of plant

which, instead of fruit, produces wool of fine quality than that of sheep.

Of this the Indians make cloths". Rao (1973) while attributing the

41

highest tribute to production of muslin cloth has said," Muslin cloth

measuring several yards was reported to have been drawn through a

finger ring and parceled in a match-box (quoted by: Nagan C.Das 1986).

The handloom weavers carried on their profession without having

schooling or any sort of technical training. They acquired the art of

weaving by tradition and thus the handloom industry forms part of the life

of weavers (Madras Townsend Committee on Cooperation 1927).

However the supremacy of Indian handloom began to decline by

the end of the 18th century (Amrik S.Sudan 1997). The Industrial

revolution in England during the second half of the 18th century, the

exploitation by British rule in India, the Great economic depression of

1930 and the subsequent world wars suppressed the handloom industry

in our country.

The British exploited through the East India Company first and

later through direct British rule in India. Indian markets were flooded with

English machine-made cloths. The duties on yarn introduced in 1927

handicapped the handloom industry and also India's cloth exports

(Venkateswara Rao 1973). These and such other discriminatory fiscal and

social policies slowly but surely paralysed the hereditary handloom-

weaving Industry. The English Governor General Bentinck (1934)

reported that "the misery hardly finds a parallel in the history of

commerce". "The bones of cotton weavers are bleached in the plains of

India" (Jawahar/al Nehru 1982). Only when Mahatama Gandhi in his,

Swadeshi movement boycotted foreign made cloth and introduced

42

khadi, the handloom weaving industry started gaining momentum. It

became a starting point after independence for gradual domination of

handlooms over powerlooms and the organised mill sector in five-year

plans (AmrikS. Sudan 1997).

Cooperativisatson of Handloom Industry

A cooperative society is an association of human beings, working

together to satisfy their common socio - economic needs and aspirations

on the basis of self-help and mutual help among the members.

Handloom cooperatives are organised with the basic objective of giving

continuous employment to weavers and improve their economic

conditions. Handloom cooperatives eliminate the exploitation by master

weavers, yarn merchant and other private owners of handloom

(Arulanandham 1979, Venkotesh 1995). They also eliminate the middlemen

profit and provide trading surplus to members.

Before Independence, bulk of weavers were in the clutches of

master-weavers, yarn dealers and cloth merchants. These middlemen

supplied the weavers with the yarn purchased from the spinning mills

within the country or from imported stocks, got them to weave cloth of

different varieties on looms belonging to them or to weavers themselves,

paid them low wages and took the cloth for sale at profitable prices

(Anjaneyalu 1990), The better-to-do weavers, who were not many,

bought the yarn from the middlemen and plied their looms for their own

benefit. But the weavers had to pay high price for the yarn they

purchased and incurred heavy expenses in marketing, the finished

products. Nearly all weavers were indebted to middlemen and

moneylenders (Dighy 1966).

The cooperative form of organisation is the only suitable way for

solving their problems related not only to weaving 'but also to the

problem of unemployment, underemployment and exploitation by master

weavers (Fact Finding Committee 1942, The Textile Enquiry Committee 1954,

Sivaraman Committee 1974). Realising the significance and suitability of

cooperatives for handloom weaving in India, Mr.F.D. Harvel reporter on

Art and Industry to the Government of Madras, first, mooted the idea of

forming weavers cooperatives way back in 1907 (quoted hy: Akiiraihi

Vengateswara Rao 1973). The attention of the Government for the first

time was drawn by the Royal Commission on Agriculture (1928) which

observed that "the survival of village industries amidst fast increasing

competition, is essential and they are to be developed on cooperative

basis" ^quoted by.' Rama lYIohana Rao 1990)

For the first time in the year 1935 the Government of India

formulated a scheme known as "Subvention Scheme". Under this

scheme an amount of Rs.5 lakhs was provided to each State for the

development of handloom Industry. The financial assistance thus

provided, enabled the Government of Madras to establish an Apex

weavers' cooperative society in the Madras province in 1935. This was

the beginning of cooperativisation of handlooms (NCUJ J995).

For the all-round development of handloom industry, the

government had appointed several committees' from time to time and

launched several schemes to solve the problems of handloom industry

in general and cooperatives in particular. Efforts were directed for

bringing weavers into the cooperative fold in order to provide financial

and technical assistance to strengthen the bargaining power of weavers.

In all the Five-Year Plans funds have been allocated for the

improvement of the handloom cooperatives. Since cooperativisation of

handlooms has been considered as an instrument of economic

development, as much as 45 per cent of weavers (about 1.97 million

cooperative weavers) were brought into the cooperative fold in 1997-98

(NCUJ 1999).

Development of Handloom Cooperatives During Plan Periods

After Independence, the Government under the leadership of

Pandit.Jawaharlal Nehru reviewed the position of cottage industries.

This resulted in the adoption of Industrial Policy Resolution by the

parliament in April 1948 {Fourth Five-Year Plan Repu/i 1969-74). From

1950 onwards, various programmes and schemes, along with various

The Fact Finding Committee (Dr. P.G. Thomas Committee 1942. Textile Enquiry Committee (Shri Nithyananda Kanungo Committee) 1954, Textile Enquiry Committee (Shri P.S. Joshi Committee) 1958. Working Group on Handloom Industry (Illrd Five Year Plan) 1959. Working Group on Handloom Industry (IV Five Year Plan) 1964. Powerloom Enquiry Committee (Shri Ashok Metha Committee) 1964. Evaluation of Handloom Developments programs 1967. High Power Study Team on the Problems of Handloom Industry ( Shri B. Sivaraman Committee) 1974, Working of Reserve Bank of India (RBI) Scheme for Handloom Finance( DR. M.V. Hate Committee) 1978, Seventh Plan Sub-Group on Handloom Industry 1983, Eigth Plan Sub-Group on Handlooms 1989, and Sathyam Committee 1997.

kinds of organisational and fiscal interventions have been implemented

by the Government of India to encourage and support the handioom

sector. Allocations made for the development of handioom sector were

channelised through the state governments.

First Five Year Plan (1951-56): The First Plan gave emphasis to

the organisation of cooperatives for the handioom weavers. On the

recommendation of the Fact Finding Committee (1945) and the Textile

Enquiry Committee (1952), the All India Handioom Board was organised

with an aim of developing this industry on sound cooperative lines and

increasing production and marketing of handioom cloth. The main heads

of development were, organisation of handioom industry in the

cooperative sector,' provision of working capital for production and

marketing, assistance for marketing of handioom cloth including a direct

subsidy for processing, training, research and technical improvements.

In March 1955, the All India Handioom Fabric Marketing Society

was registered for undertaking marketing of handlooms on a national

scale and for establishment of warehouses and emporia in the principal

cities. During the first plan period, a sum of Rs. 11.07 crores was spent

for the development of handioom sector and the number of weavers

brought into the cooperative fold was estimated at about 88 lakhs and

the number of looms included in cooperatives stood at 10.26 lakhs in

1955-56. This represented over 60 per cent of the estimated total

46

number of active looms in the country (First Five Year Plan Progress

Report 1956).

Second Five Year Plan (1956-1960): Efforts for cooperativisation

continued in the Second plan also. The plan envisaged development

programmes for the handloom industry by providing assistance to

handlooms, which were brought into cooperative sector. Weavers in

cooperative societies were given greater assistance than those working

on their own. It was proposed to increase the number of looms in the

cooperative fold from one million to 1.45 million. Loans were sanctioned

to weavers to enable them to join in cooperatives, and the working

capital also was provided (Second Five Year Plan Progress Report I960).

The plan provided for an expenditure of Rs.180 crores for village and

small-scale industries. Of which a sum of Rs.25.48 crores was spent for

the development of handloom industry (Government of India - A

Reference Annual 1967).

Third Five Year Plan (1961-66): The Third Five year plan aimed

at effecting expansion through fuller employment for handloom weavers,

introduction of improved techniques of production, revitalisation of weak

cooperatives and liberal loan assistance to weavers' cooperatives. Out

of the total provision of Rs.34 crores, an amount of Rs.22.21 crores was

spent for handloom development schemes during the plan period

(Government of India -A Reference Annual 1967). As a result of all these

efforts, the actual production of handloom cloth by the decentralised

47

sector which was 1930 million yards in 1960-61, went up to 2250 million

yards in 1962-63 (Planning Commission 1967).

Three Annual Plans: The schemes for the development of

handloom industry in the Annual Plans were formulated incorporating all

the objectives, policies and programmes laid down for the Fourth Five

Year Plan. Further, it was also proposed to revitalise a number of weak

cooperative societies and also to set up worksheds as common weaving

centres on a pilot basis mainly to meet export requirements. On account

of adoption of various measures to assist the handloom industry,

including the reservation of certain types of production to encourage

cooperatives, substantial progress had been made in the

rehabilitation of the handloom industry. The share of this sector in the

total cloth production stood at 30.4 per cent in 1968. The number of

looms in the cooperative sector increased from 1.32 millions in 1960-61

to 1.41 millions in 1966-67, and the number of powerlooms from about

1,45 lakhs to 2.17 lakhs. The handloom industry provided employment to

nearly three million weavers. The value of export of handloom fabrics

increased from Rs.5 crores in 1960 to about Rs.12.6 crores in 1965.

However in the year 1968 it declined to about Rs.8.2 crores owing

mainly to shrinkage in the demand for 'bleeding madras kerchiefs'

(Fourth Five Year Plan Report P)69-74).

Fourth Five Year Plan (1969-74): In the Fourth Five year plan,

programmes for the development of handloom industry were formulated

48

to assist the handloom cooperatives in obtaining required credit for

working capital, getting regular supply of yarn of the required counts and

also other essential raw materials at reasonable rates, training the

weavers in improved equipment and appliances, and effectively

enforcing the restrictions on production of cloth exclusively reserved for

handloom sector. Steps were taken to concentrate on production of

varieties which provided higher earnings with export possibilities and to

set up common service facilities centres.

The fourth plan target for production of cloth was 4,250 million

metres whereas the actual production was 3,650 million metres resulting

in a shortage of 600 million metres. Moreover, most of these measures

did not bear fruit to the fullest extent largely due to the rapid growth of

unauthorised power looms, shortage of yarn, inadequate credit facilities,

high percentage of dormancy among handloom weavers' societies and

marketing difficulties (Fifth Five Year Flan Report 1974-79).

Fifth Five Year Plan (1974-79): The main objective of the plan

was to facilitate removal of poverty and inequalities in consumption

standards of persons depending on the traditional industries like

handloom, khadi, coir etc. Hence the plan aimed at increasing the

production of basic and essential commodities needed by the masses.

Effective measures therefore were taken to restructure the various small

industries organised on cooperative basis into viable societies.

Necessary provisions were made in the State plans to give loans, share

49

capital, interest and managerial subsidies for the existing viable

industrial cooperatives and also for the organisation of new

cooperatives. A sum of Rs.55.32 crores was spent during the plan

period for the handloom development.

Moreover a package of support programmes was implemented as

per the recommendations of a Study Team on Consumption Credit

headed by Shri. B.Sivaraman (1973) during this plan. The employment

coverage increased from 52.1 lakh persons to 61.5 lakh persons and the

value of handloom goods exported (excluding silk goods) increased from

Rs.77 crores to Rs.261 crores. By March 1980, of the 30.21 lakh

handlooms in the country, 13.17 lakh looms had been brought under the

cooperative fold. But the effective coverage was estimated at about 31

per cent as against the fifth plan target of 60 per cent. Under the

Reserve Bank of India (RBI) scheme for handloom finance for weavers'

cooperatives for production and marketing, an amount of Rs.58 crores

was sanctioned in 1979-80. Besides, 25 Intensive Handloom

Development Projects with a coverage of about 10,000 looms and nine

weavers service centres were established during this plan period ( Sixth

Five Year Plan Report 1980-85).

Sixth Five Year Plan (1980-85): The Sixth Five Year Plan was

launched by the Government with the objective of removal of poverty.

Programmes for the development of village and small scale industries

were drawnup to generate large scale employment opportunities on a

50

decentralised and dispersed basis to upgrade the existing levels of skills

of artisans as well as quality of their products, and to step up production

both for mass consumption and export.

The sixth plan gave a detailed direction for the development of

handloom industry. The plan envisaged to bring 60 per cent of the

handlooms under the effective cooperative coverage, providing

assistance through the National Cooperative Development Corporation

(NCDC) for setting up of new cooperative spinning mills and improving

the existing ones, giving managerial subsidy to new and potentially

viable cooperative societies on a tapering basis in selected areas,

assisting loomless weavers to organise themselves into industrial type of

cooperative societies and assisting the All India Handloom Fabrics

Marketing Cooperative Society.

During the plan period, an amount of Rs.120 crores was spent for

handloom development and the production target for handloom sector

was fixed at Rs.370 crores (Reference Animal 1980). About 16 to 17 lakh

weavers were brought under cooperatives. Although the gross coverage

was about 60 per cent, the effective coverage of looms in the

cooperative fold was only about 32 per cent due to the dormancy of

many cooperatives. Equity capital assistance to apex societies had been

increased from Rs.85 lakhs in 1976-77 to Rs.356.60 lakhs in 1983-84.

Under the RBI scheme of handloom finance operated by National Bank

for Agriculture and Rural Development (NABARD), short term credit

limits sanctioned also had gone up from Rs.51 crores in 1978-79 to

Rs.232.76 crores during 1984-85 (Seventh Five Year Plan Report 1985-90).

Seventh Five Year Plan (1985-90): Emphasis was laid on

cooperativisation and development of handlooms through central/state

level corporations, and modernisation of looms and provision of

technological inputs. Ensuring adequate availability of yarn and other

raw materials, increasing the production of mixed and blended handloom

fabrics, increasing spindelage capacity in cooperative sector, providing

design support to improve the competitiveness of the product, improving

marketing and infra-structure support and strengthening the data base

were the other measures contemplated under the plan.

An outlay of Rs.168 crores was provided for the entire production

of controlled cloth which had been transferred to the handloom sector by

the end of the seventh plan. In spite of the impressive performance

recorded so for in this field, the fact remained that the number of active

looms in the cooperative sector was considerably low. It was estimated

that the effective coverage by the cooperatives would not have been

more than 32 percent of the total looms in the country (Eighth Plan Draft

Report 1989).

Eighth Five Year Plan (1990-95): In the Eighth Five Year Plan,

effective measures were taken to bring all the weavers into the

cooperative sector. Simultaneously, steps were also contemplated to

revitalise the dormant weavers' cooperative societies. With a view to

52

enable the cooperatives to overcome cut-throat competition, a well

defined co-ordinated approach in relation to handloom industry by

defining the roles and responsibilities of various handloom development

agencies was formulated. Moreover, to ensure production of quality cloth

suiting to the consumer taste, necessary supportive steps for expansion

of pre-loom and post-loom facilities, workable research and development

programmes, flow of adequate financial resources and development

programmes, market intelligence and systematic training programme for

weaker members of each cooperative were made. Since increased price

of yarn had been adversely affecting the cost of production, the price

structure of yarn to be supplied to handloom cooperatives was

rationalised. Handloom development corporations, set up in various

states had been directed to support the cooperatives by providing

necessary technological and market support rather than competing with

other fabrics in the market (Eighth Five Year Plan Draft 1989).

Ninth Five Year Plan (1997-2002): The government of India has

been emphasizing the need for providing continuous employment to

weavers. By the end of this plan, the employment in handlooms is

expected to reach about 173 lakh people and production of cloth

measuring 8,800 million sqm. To increase the number of weavers under

the cooperative fold and to encourage production of market oriented

items, a scheme for setting up of 3,000 Handloom Development Centres

(HDCs) and 500 Quality Dyeing Units (QDUs) with an investment of

Rs.831 crores was taken up in 1993-94. The government had approved

setting up of 1,588 HDCs and 313 QDUs by 31.3.1997 and released

sum of Rs.80.91 crores to various state governments and union

territories under this scheme. Setting up of remaining HDCs/QDUs is

proposed to be completed during this plan period.

To ensure regular supply of hank yarn to handioom weavers at

reasonable price, a scheme for supplying hank yarn at mill gate prices

through National Handioom Development Corporation (NHDC) is being

implemented. Under the hank yarn obligation scheme, it is mandatory

for yarn producers to supply up to 50 percent of their yarn production

with 40 counts in the form of hank yam. This ensures continuous hank

yarn supply to the handioom weavers. In order to provide welfare

measures and better working conditions to handioom weavers, this

scheme would be continued during this plan period.

During this plan a greater stress would be laid on production of

marketable items, reduction in dependence upon rebate, enhanced

inputs like dyes and chemicals in small packages, skill upgradation,

designs and product etc., and welfare packages to improve the quality

of life and development of weavers. The workshed-cum-Housing

scheme, with higher targets, would be implemented during this plan to

provide better work places and safe environment, resulting in increasing

productivity and earnings of weavers (Ninth Five Year Plan 1997-2002).

Measures for Handloom Development in Tamil Nadu

The Government of Tamil Nadu have been the forerunner in

implementing various schemes in order to bring succor to the handloom

weavers. It has set an example to other State Governments in

implementing various Welfare and Development Schemes of

Government of India most effectively. In order to provide continuous

employment and improving the socio-economic conditions of the poor

weavers, the following programmes formulated and implemented by the

Government of Tamil Nadu, in collaboration with Central Government

NABARD, NCDC and other National level agencies could be grouped

under four categories: (i) Measures concerning the structural soundness

and viability of the handloom cooperative sector (ii) Employment

generation programmes (iii) Market support measures (iv) Weavers'

welfare measures and (v) Developmental programmes.

Measures Concerning the Structural Soundness and Viabil i ty

Working Capital at Concessional Rate of Interest to Handloom

Weavers Cooperative Societies: With a view to increasing the flow of

working capital to this sector, refinance facilities are being provided by

NABARD at a rate 2.50 per cent below the bank rate. Interest subsidy of

3 per cent is provided by the State Government to the financing banks in

respect of finances provided to primary handloom weavers cooperative

societies (pwcss) for production purpose and one per cent subsidy for

marketing finance in respect of the State Handloom Weavers

35

Cooperative Society (the Cooptex). On this account for the year 1997-98

a sum of Rs. 952:90 lakhs has been sanctioned by the Government

towards interest subsidy (Government of Tamil Nadu J998).

Cooperative Spinning Mill: During the year 1975, the Tamil

Nadu Government evolved a system for regular supply of hank yarn to

the handloom weavers under the cooperative fold. At present, there are

18 cooperative spinning mills in Tamil Nadu with an installed capacity of

4,69 lakh spindles and a labour force of 12,000 Workers. During 1997-98,

by conversion to 40 counts yarn the cooperative spinning mills produced

250 lakh kgs. With a viewto supply the good quality yarn at reasonable

rates to handloom weavers without interruption, the Government has

been taking steps to rehabilitate and run the mills to their full capacity.

The Government as a relief measure, have exempted 18 cooperative

spinning mills from immediate repayment of debts.

The Tamil Nadu Zari Limited: This is a public sector unit created

for manufacture and supply of quality zari to silk weavers' cooperative

societies at reasonable price. The Government so far have invested a

paid up share capital of Rs. 13.20 lakhs. At present the average monthly

production of zari is 3575 marcs. The (.mit has planned to take up

expansion work for production of 2000 additional marcs (Pi/chai P-j^X).

Textile Processing iVIiKs Limited: With the object of dyeing or

yarn and processing of the cloth of primary weavers' cooperative

societies and the Cooptex, the Textile Processing Mills Limited was

56

started during the year 1973 at Erode. The mill has a capacity to

process about 19 lakh metres of cloth per month. This is the only

processing mill under the cooperative sector. During the year 1997-98,

the entire cloth requirements of the Cooptex have been processed by it.

Employment Generation Programmes

Industrial Weavers' Cooperatives: With a view to providing

uninterrupted employment to weavers, the Government have organised

workshed type Industrial Weavers Cooperative Societies. At present

153 industrial weavers cooperatives are functioning with 14,717 looms in

the State. Out of these, 29 Industrial weavers cooperative societies have

been organised for the exclusive benefit of Adi-Dravidas and 10

industrial weavers cooperative societies have been set apart exclusively

for women. During the year 1997-98, these societies accounted for a

total production and sale of 66.58 lakh metres and 62.39 lakh metres of

cloth respectively (Government of Tamil Nadu 1998).

Janatha Cloth Scheme: Janatha cloth scheme was introduced

during the year 1976, to achieve the twin objectives viz. to cater to the

clothing needs of poor people at affordable price and to provide

continuous employment and to ensure regular wages to weavers.

Government of India provided subsidy at the rate of Rs.3.40 per sq.

metre of cloth produced under this scheme. During 1997-98 the

Development Commissioner for Handlooms, New Delhi has fixed the

target of 18 million sq. metres for Tamil Nadu. The total subsidy eligible

57

for the production is Rs. 612 lakhs and the same has been released to

the State Government in 1997-98 (VenugopalRao 1998). The distribution

of the Janatha cloth is being done by the Cooptex.

Free distribution of sarees and dhothies: The object of this

scheme by the Government is not only to distribute sarees and dhoties

free of cost to those who live in poverty but also to provide employment

to cooperative weavers. The total expenditure incurred under this

scheme during 1997-98 was Rs. 9259.75 lakhs (Government of Tamil

Nadu 1998) and the entire requirement of sarees and dhoties was

produced through handloom and power loom weavers cooperative

societies.

Free supply of uniforms to school children: With a view to

provide employment to cooperative weavers, the State Government

have nominated the Director of Handlooms and Textiles as the Nodal

Agency for supply of uniforms to school children free of cost. The entire

production and processing of 188.49 lakh metres valued at Rs. 56.74

crores have been completed and the cloth has been handed over to

social welfare department for stitching the uniform. Besides this,

21.86 lakh metres valued at Rs. 6.79 crores have been supplied to the

school children of the Adi-Dravidar and Tribals, Backward classes and

Minorities and Most Backward Classes and denotified communities.

Project Package Scheme: Tamil Nadu Government have been

implementing the centrally sponsored Project Package Scheme with the

58

object of providing continuous employment to weavers and improve their

standard of living. The project package scheme consists of commercial

and non-commercial components. The non-commercial components

include electrification of work sheds, supply of accessories to integrated

handloom village development programmes, margin money assistance

for working capital and introduction of new designs. Financial assistance

as subsidy under the non-commercial component is shared equally by

the Government of India and the Government of Tamil Nadu.

Market Support Measures

Market Development Assistance/Rebate Scheme: In order to

enable the handloom cooperatives to compete effectively with mill and

powerloom sectors, the government have introduced the system of

allowing rebate on the sale of handloom cloth under cooperative fold.

The state governments have revised their rebate policy with effect from

08.09.97. As per the new rebate policy, rebate at the rate of 20% is

being allowed on sale of handloom goods of primary weavers

cooperative societies (pwcss) throughout the year and pwcss are eligible

for reimbursement of the rebate amount from the Government for the

whole year without any ceiling. The sale of handloom goods made to

Cooptex by the primaries is also eligible for claiming rebate. In the year

1997-98 the Government of Tamil Nadu have sanctioned a sum of Rs.

2355.85 lakhs for the rebate claims of the primary weavers cooperative

societies and Rs. 1456.74 lakhs for the Cooptex (Govemmeni of Tamil

Nadu 1998).

)

Modernization of Showrooms: To attract customers and to

capture a wide market by handloom cooperatives, financial assistance

has been extended by the Government for modernisation which include

renovating, decorating of and providing air conditioners etc., to the

showroom of primary weavers cooperative societies (pwcss). During the

year 1997-98 the Government have sanctioned Rs. 50 lakhs for

modernisation of showrooms of nine primary weavers cooperatives and

also the show rooms of 41 weavers cooperative societies situated at the

newly opened Cooptex Handloom Marketing Complex in Chennai.

Project Package Scheme for Export of Handloom Products: The

Government of India have sanctioned three export projects under project

package scheme for boosting export of handloom products by providing

various inputs including working capital loans to implementing agencies,

modernisation of looms, design development, quality control, marketing

supports and training of weavers at Chennimalai, Madurai and Karur

regions in consultation with the Handloom Exports Promotion Council

which has been set up to administer the export oriented projects in Tamil

Nadu. The Government of India have sanctioned a sum of Rs.120

lakhs and Rs.45 lakhs will be in the form of subsidy and Rs. 75 lakhs as

loan to be shared equally by both the Government of India and the State

Government.

Handloom Cooperative Marketing Complex: With an object of

boosting the sale of handloom cotton and silk fabrics produced by the

60

primary weavers cooperative societies, as part of marketing strategy, the

Government have seven marketing complexes in different places. All

handloom varieties right from towel to expensive silk sarees are being

sold at competitive price under one roof. The general response from the

public is highly encouraging and the performance is constantly watched

and monitored.

Prize Award Scheme for the Best Exporters: To encourage

export trade in handloom cloth and to widen the market in foreign

countries, the Government of Tamil Nadu have been implementing

Award Prizes Scheme to the best exporters of Tamil Nadu. This scheme

is being implemented from 1975 onwards. The Government have

sanctioned a sum of Rs. 22,500/- per year under this scheme for

awarding prices to the best exporters. During 1997-98 nine exporters

were awarded trophies and certificates.

Weavers' Welfare Measures

Handloom Weavers Savings and Security Scheme: Savings

and security scheme for cooperative handloom weavers is being

implemented from 1975-76. The members admitted under this scheme

are contributing eight paise per rupee of wages earned by them over

which the State Government are contributing four paise per rupee of

wages earned by each weaver. The accumulations under this fund is

given seven per cent interest per annum. The State Government have

enhanced the retirement age of the weavers from 58 to 60 years of age.

During 1997-98 a sum of Rs. 265 lakhs towards Government

contribution and Rs. 387.54 lakhs towards seven per cent interest have

been sanctioned under this fund.

Group Insurance Scheme for Handloom Weavers: Under the

present Group Insurance Scheme for handloom weavers, the life of a

weaver is covered by Life Insurance. The State Government pay two-

third and Government of India pay one-third of the insurance premium

on behalf of each weaver. In the event of death of a handloom weaver

enrolled under the scheme, the insured amount to be disbursed to the

family has been raised from Rs. 15,000 to Rs. 25,000.

The Government of India have introduced a new group insurance

scheme in which each weaver is covered against various kinds of loss to

the dwelling houses, weaving accessories etc. in addition to the security

of his or her life. The Government have decided to introduce a 'Self

Insurance Scheme' for handloom weavers by constituting a 'corpus

fund' which is under consideration of the Government. Under this

scheme a sum of Rs. 100 lakhs has been sanctioned for 1997-98 and

the Director of Handlooms and Textiles has been authorised to draw and

disburse insurance amount to the legal heirs of the deceased weavers.

Central Thrift Fund Scheme: The Central Thrift Scheme is a

parallel one to Savings and Security Scheme and the Government of

India have been participating in the scheme from 1985-86 onwards.

Under this scheme apart from the contribution of eight paise per rupee

62

of wage earned by a weaver, the Government of India pays four paise

per rupee of wage earned. The Government of India's share of four per

cent is also deposited into the savings and security scheme fund

account which would earn seven per cent interest. Under this scheme,

proposals have been submitted by the State Government to Government

of India for sanction of Rs. 399.75 lakhs for the year 1997-98 of which

the Government of India have released a sum of Rs. 180.00 lakhs as

first installment. Out of this, the State Government have sanctioned Rs.

150.00 lakhs towards this scheme.

The Weavers House-cum-Workshed Scheme: The Weavers

Housing Scheme is being implemented with loan assistance from

Housing and Urban Development Corporation and subsidy from the

Government. The total cost of House-cum-Workshed works out to

Rs.51,000/- per unit, of which Rs.5000/- is state subsidy and 18,000/- is

central subsidy and Rs.3000/- is contribution of beneficiaries and the

remaining amount is the loan assistance by the HUDCO.

Health Package Scheme: With a view to ameliorating some of

the health problems related to handloom weaving profession, a new

scheme namely, 'Health Package Scheme for Handloom Weavers' with

100 per cent central subsidy which is inclusive of providing assistance

for primary health care, has been introduced by the Government of India

with effect from the financial year 1992-93 under the following heads:

(i) reimbursement of cost of medicine, (ii) reimbursement of cost of eye

63

test and spectacles, (iii) supply of drinking water, (iv) maternity benefit

for women, (v) compensation for sterlisation, (vi) infrastructure for

primary health centres. During the year 1997-98 the Government of

India have released a sum of Rs. 110.16 lakhs under this scheme, of

which the state Government have sanctioned a sum of Rs. 55.08 lakhs

towards 50 per cent subsidy.

Tamil Nadu Cooperative Handloom Weavers Family Pension

Scheme: Tamil Nadu is the first State to introduce a new welfare

scheme for weavers of cooperative societies called "Tamil Nadu

Cooperative Handloom Weavers Family Pension Scheme". A weaver

who has completed 5 years of membership in a weaver's cooperative

society and produced 75 per cent of the average annual production in

linear metres in respect of a particular variety of cloths would be

admitted into the scheme. In the event of the death of the member with

in 58 years of age, his family members viz., wife or minor son or

unmarried daughter or widowed daughter or widowed daughter-in-law

nominated by him will be eligible for the payment of family pension of

Rs. 250/- per month for a period of 10 years. Under this scheme 31,448

weavers were enrolled till 1997-98 and 319 families of the deceased

weavers have availed the pension.

Cooperative Handloom Weavers Old Age Pension Scheme:

Members of the weavers cooperative societies in Tamil Nadu who have

been contributing to the savings and security scheme are eligible to

receive a sum of Rs. 150/- per month as pension from the date of their

superannuation i.e.,after attaining the age of 60 years. This scheme

has come into effect from 1st April 1997. 157 old age pension claims

have been received so far from the primary weaver's cooperative

societies and pension will be sanctioned shortly.

Developmental Programmes

integrated Cooperative Development Programme: Under this

scheme the National Cooperative Development Corporation (NCDC) is

extending financial assistance through State Government for the

purpose of granting margin money to strengthen the working capital

base of weavers cooperative societies, for the construction of dye

houses, godowns and showrooms etc. These programmes have been

implemented in various districts.

integrated Handloom Village Development Programme: The

Government have introduced the 'area based' approach programme by

adoption of villages. Under this scheme a most backward handloom

village which is located in a remote area and lacking in infrastructure and

basic amenities will be considered for introducing integrated

development activities aimed at overall development of the village. 13

villages in various districts have been selected for this purpose and Rs.

148.17 lakhs have been released under this programme.

The Scheme of Handloom Development Centres and Quality

Dying Units: To provide complete package to the handloom weavers,

the Government of India introduced the scheme of Handloom

65

Development Centres and.quality dying units during the year 1993-94.

Under this scheme it is proposed to establish 3000 handloom

development centres and 500 quality dying units throughout the country.

The cost of establishing each handloom development centre is

estimated at Rs. 27 lakhs, out of which Rs. 10 lakhs is being provided as

subsidy by the Government of India and Rs. 17 lakhs is to be obtained

as loan from NABARD under the re-finance scheme.

Thus, both the Central and State Governments have taken

commendable efforts through various schemes for the development of

handloom industry in general and handloom weavers' cooperatives in

particular in our country.

66

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