Wednesday, March 12, 2008

[ Rs.6000 Crores gone to Farmers.Now Rs.1200 Crores will go to Weavers.(Whose money) ]

Handloom weavers may join loan relief mela
Rupesh Janve / New Delhi March 11, 2008
The loan waiver jamboree appears to be gathering pace. After announcing the farm debt waiver and relief scheme, the government is considering a package to waive overdue interest and loans of handloom weavers outstanding as of March 31, 2006. The bailout is likely to cost the exchequer more than Rs 1,200 crore.
Last week, EVKS Elangovan, minister of state for textiles, told the Rajya Sabha, that his ministry has set up a committee headed by the managing director of National Bank for Agriculture and Rural Development to look into problems like the high cost of working capital and tight credit lines in the handloom sector.
The committee has prepared a financial package, which is currently being examined by the government.
A senior textiles ministry official told Business Standard that he expects the bailout package to work out to over Rs 1,200 crore, but added that the details would be worked out in consultation with the finance ministry.
Compared with the farm package, the handloom weaver bailout may not seem like big money. However, given that the United Progressive Alliance government seems to have moved into election mode, the concession would go a long way in mollifying the politically sensitive handloom lobby.
According to one estimate, nearly 6.5 million people are involved in weaving and associated activities in the handloom sector principally located in states like Uttar Pradesh, Gujarat, Maharashtra and Tamil Nadu.
The proposals under consideration also aim at cleaning up the balance sheets of apex and primary weavers cooperative societies through government support, as well as financing the credit needs of handloom weavers and societies by offering concessional credit at around 7 per cent interest.
The package has been in the works for some time now. Around two years back, the proposal would have cost the exchequer Rs 1,000 crore, the official added. The amount has risen since and it is now almost certain that the government will finalise the package shortly.
The finance ministry has allocated Rs 340 crore for fiscal 2008-09 to bring more handloom weavers under the health insurance safety net.
By the end of this month, over 1.7 million families of weavers will be covered under the scheme.
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