Pradhan Mantri Credit Scheme: Industry cheers incentives to powerlooms

The government has introduced schemes for financial assistance of up to 90 per cent under the Pradhan Mantri Credit Scheme for powerloom weavers. 

Under this scheme, the government will provide margin money subsidy to the extent of 20 per cent of the project cost, with a ceiling of Rs 1 lakh, as well as interest subvention at six per cent per annum, both for working capital and term loans up to Rs 10 lakh for a maximum of five years.

Another scheme for the ailing powerloom sector is Sustainable and Accelerated Adoption of Efficient Textile Technologies to Help Small Industries, abbreviated as SAATHI. “This is expected to benefit almost 2.5 million powerloom units, which produce 57 per cent of total cloth in the country. The use of efficient equipment would result in energy savings and cost savings to the unit owner, who would in turn repay in instalments to EESL (Energy Efficient Services Ltd) over a three to four-year period,” said Ujwal Lahoti, chairman, The Cotton Textiles Export Promotion Council.

The schemes provide for powerloom units to not only upgrade technology but to install solar power equipment to cut energy costs. “The Union ministry and state governments have announced several promotional schemes for powerloom textiles but there is hardly any awareness in the industry. The highest benefit of these schemes have been taken by entrepreneurs of Gujarat and Tamil Nadu. The solar energy scheme for small powerloom units will help the unit to pay back bank loans within three to four years. After this initial repayment period, the unit shall get practically free electricity,” said Kavita Gupta, textile commissioner.

Of the 2.5 million powerlooms, half are in Maharashtra. There are 108 powerloom clusters in the country and 72 textile parks. While welcoming the increase in the Merchandise Exports from India Scheme (MEIS) from two to four per cent, Lahoti urged the government to include cotton yarn under it. And to similarly raise the MEIS on cotton fabric. “While every other segment in the textile value chain has been provided with MEIS benefits, cotton yarn has been excluded for some inexplicable reason, though it was included in the Focus Market Scheme and Incremental Export Incentive Scheme under the earlier Foreign Trade Policy,” he said.

The spinning sector is passing through difficult times and losing market share to Vietnam and Indonesia due to increasing costs. Withdrawal of export incentives for cotton yarn has reduced India’s competitive edge, as local prices have increased by five to six per cent, is the complaint. More of cotton yarn export will benefit not only the spinning sector but also cotton farmers and the value-added segments of fabric and made-ups/garments, said Lahoti.