Powerloom sector demands loan waiver, financial aid | SupportBiz


Powerloom sector demands loan waiver, financial aid

Unstable cotton and cotton yarn prices and lower export demand are forcing India’s small weavers to shut shop, and in some cases, burdened by debt, take the extreme step. Alarmed by developments, the powerloom sector wants the government to waive loans and dole out cash incentives to small weavers, according to a trade body.

“For about two years now, cotton and cotton yarn prices have witnessed turbulent rise and fall. Demand, both within and outside the country is bad. We were informed of several weaver suicides in the Karnataka and Andhra Pradesh states. We want to government to intervene and support the sector,” said  Bharatkumar M. Chhajer, chairman, Powerloom Development & Export Promotion Council (PDEXCIL).

PDEXCIL wants the government to waive loans of up to Rs. 10 lakh, per unit. It also seeks a rupees two lakh relief package for small weavers, who own a minimum of eight looms, Chhajer said. “There are about one lakh small weavers across the country, each owning anywhere between four to 12 looms. 50,000 are in great trouble,” Chhajer said.

Export orders from Europe and the US, both major markets for powerloom fabrics, are 30 percent and 15 percent respectively, and this is adding to weavers’ woes, said Chhajer.

PDEXCIL list of demands include the creation of a mechanism that can stabilize the prices of yarn, if necessary by restricting its export; creation of a yarn bank; and removal of cotton from the forward commodities exchange, according to a PDEXCIL media release.

India has over 22 lakh powerlooms but only around 1.5 lakh are automatic looms. The rest are semi-automatic or manually-operated looms, Chhajer said.

The powerloom sector employs close to 56 lakh people across the country, said the media release. The major powerloom clusters are Erode and Coimbatore in Tamilnadu; Bhiwandi, Ichalkaranji and Malgaon in Maharashtra; Burhanpur in Madhya Pradesh, Surat and Ahmedabd in Gujarat and Bhilwara in Rajasthan.  

India netted Rs. 263,608 million from the export of cotton yarn, fabrics and ‘made-ups’ in the 2010-11 financial year. The figure increase to Rs. 326,118 million during the 2011-12 financial year, according to data available with PDEXCIL.