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Thread: Ministry of Textiles - Comprehensive Handlooms Cluster Development Scheme (CHCDS)

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    Thumbs up Ministry of Textiles - Comprehensive Handlooms Cluster Development Scheme (CHCDS)

    Ministry of Textiles

    Development of Mega Cluster Scheme

    COMPREHENSIVE HANDLOOM CLUSTER DEVELOPMENT SCHEME
    (CHCDS)



    1. INTRODUCTION

    1.1 The Handloom Sector is the second largest employer in India, providing employment to about 65 lakh persons. The sector represents the continuity of the age-old Indian heritage of hand weaving and reflects the socio-cultural tradition of the weaving communities. The Government of India has been following a policy of promoting and encouraging the handloom sector through a number of policies and programmes. Most of the schematic interventions of the Government of India in earlier Plan periods have been through the State Agencies and Co-operatives in the Handloom sector. However, in the face of growing competitiveness in the textile industry both in the national and international markets and the free trade opportunities emerging in the post MFA environment, a growing need has been felt for adopting a focused yet flexible and holistic approach in the sector to facilitate handloom weavers to meet the challenges of a globalized environment. A need has also been felt to empower weavers to chart out a sustainable path for growth and diversification in line with the emerging market trends.

    1.2 The handloom sector is suffering due to its very nature of being unorganised and dispersed. There is lack of education, lack of inadequate working capital, inadequate infrastructure, poor exposure to new technologies, absence of market intelligence, stiff competition with mechanized sector and poor institutional framework. Moreover, edifice of our policies and programmes has been built on the cooperative structure, which covers only about 15% of the total weaver population. Those outside the cooperative are largely at the mercy of the market forces and continue to be vulnerable to market volatility of various types. A comprehensive scheme has, therefore been drawn which, while taking care of modernization, will also cover issues relating to development of basic & technical infrastructure, technology up-gradation, improvement in productivity, skill up-gradation, improving dyeing facilities, value addition, product diversification, environment friendliness, market development etc.


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    Thumbs up Comprehensive Handlooms Cluster Development Scheme (CHCDS) - Comprehensive Handloom Cluster Development Scheme A Central Sector Scheme

    Comprehensive Handlooms Cluster Development Scheme (CHCDS)


    2. COMPREHENSIVE HANDLOOM CLUSTER DEVELOPMENT SCHEME A CENTRAL SECTOR SCHEME

    2.1 There are 470 handloom clusters, out of which 240 clusters have less than 1000 handlooms and 230 clusters have more than 1000 handlooms. Out of these 230 clusters, there are 41 clusters, which have over 25,000 handlooms. Some of these clusters have very poor infrastructure and common facilities, causing hardships to the weavers. Since these clusters are very large, they would not be properly covered under the Integrated Handlooms Development Scheme, which caters to the small clusters in the range of 300-500 looms. These clusters will require massive investment to galvanize them to higher production. It is with this in mind, Comprehensive Handloom Cluster Development Scheme is introduced to overcome these constraints faced by the weavers within the cooperative sector and outside; including those attached to Self Help Groups, NGOs, Small and Medium Enterprises, Master Weavers and unattached weavers. The handloom weavers shall be the focus for assistance under the new scheme. While there are several schemes existing for taking care of specific requirements of the weavers, the main thrust of this scheme would be on need based approach for integrated & holistic development of handloom concentrated areas that will encompass several traditional, ethnic and languishing weaving crafts capable of diversification and meet the requirements of the present day market demands both within the country and abroad.

    2.2 The comprehensive Handloom Cluster Development Scheme will be implemented for development of 2 Handloom Clusters (Varanasi & Sibsagar), each covering over 25,000 looms at a cost of Rs.70.00 Crore per cluster. The scheme would be implemented as a Central Sector Plan Scheme.


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    Thumbs up Comprehensive Handlooms Cluster Development Scheme (CHCDS) - OBJECTIVES AND STRATEGY

    Comprehensive Handlooms Cluster Development Scheme (CHCDS)


    3. OBJECTIVES AND STRATEGY:

    3.1 The objective is to develop 2 Mega Clusters that are located in clearly identifiable geographical locations that specialize in specific products, with close linkages and inter dependents amongst the key players in the cluster by improving the infrastructure facilities, with better storage facilities, technology up-gradation in pre-loom/on-loom/post-loom operations, weaving shed, skill up-gradation, design inputs, health facilities etc. which would eventually be able to meet the discerning and changing market demands both at domestic and at the international level and raise living standards of the millions of weavers engaged in the handloom industry. The broad objectives of the scheme are as follows:

    To empower handlooms and build their capacity to enhance competitiveness of their products in the domestic as well as global market in a sustainable and reliant manner;

    To facilitate collectivization of handloom weavers and service providers for procurement, production, marketing and other support activities to promote sustainable growth and diversification;

    To give a proper thrust to design development through creation of design studio and involvement of professional designers,

    To involve professional marketing chains and marketers to identify the items of production to meet the changing demands of the market,

    To provide requisite support/linkages in terms of adequate core & technical infrastructure, technology, product diversification, design development, raw material banks, marketing & promotion, credit, social security and other components that are vital for sustainability of weavers engaged in the handloom sector;

    To provide for development of handloom clusters in an inclusive and holistic manner in an environment of empowered and participative decision making;

    To encourage convergence of schematic assistance and support services from various schemes and programmes of various government and other agencies in the cluster to optimize resource utilization for betterment of the livelihood, quality of life of handloom wavers and increase income level of the weavers.

    Public Private Partnership (PPP) model in the form of collaboration between the Government, beneficiary weavers & their group, financially creditworthy & commercially linked marketing enterprises and the financial Institutions.


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    Thumbs up Comprehensive Handlooms Cluster Development Scheme (CHCDS) - SCOPE OF THE MEGA CLUSTERS

    Comprehensive Handlooms Cluster Development Scheme (CHCDS)


    4. SCOPE OF THE MEGA CLUSTERS:

    4.1 The handloom weavers, due to lack of education, in-adequate working capital and lack of market facilities etc. are unable to meet the requirements of the ever-changing market demands. Coupled with this are cost affecting factors like low level of technology, poor infrastructure facilities viz dye houses, common facility centre, quality control labs, electricity, water, roads, etc. To overcome these bottlenecks and to enable institutional development, it would be essential to federate prominent stakeholders to form a Public Private Partnership (PPP) module. Mega clusters in various parts of the country will be taken up for their holistic development, for which comprehensive development plans would be drawn up and implemented on PPP mode. Each Mega cluster will cover more than 25,000
    looms.

    4.2 Nature and level of assistance to each of the said clusters will be need based and would include the components that are necessary for meeting the objectives, such as, Technology upgradation, Product Diversification, Raw Material Bank, Credit, Market Development, Forward & Backward Linkages, Human Resource & Skill Development, Social Security, Physical Infrastructure, Export & Marketing, Margin Money for Working Capital, Corpus Fund for Yarn Depot etc.

    4.3 The above list is only illustrative yet not restrictive. There will be flexibility to suit the local requirements. The Project Approval & Monitoring Committee (PAMC) will decide on merit the inclusion or otherwise of a component in the project cost on cluster to cluster basis.


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    Thumbs up Comprehensive Handlooms Cluster Development Scheme (CHCDS) - Diagnostic Study and formulation of Detailed Project Report (DPR)

    Comprehensive Handlooms Cluster Development Scheme (CHCDS)


    5. PROJECT COMPONENTS:

    5.1 Diagnostic Study and formulation of Detailed Project Report (DPR)

    Diagnostic survey of the identified handloom concentrated area is the prime requirement for ascertaining the needs of specific interventions required for making the handloom concentrated area self-sustainable. The Detailed Project Report shall also include the requisite details under each of the activities that would be undertaken for different components of this scheme, including activity-wise financial implications, means of financing pattern of release of funds, implementation schedule and duration etc. This activity shall be carried out by the Cluster Management & Technical Agency (CMTA) as a part of their responsibilities and therefore, this will be met out from the overall Project Management Cost to be paid to CMTA.


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    Thumbs up Comprehensive Handlooms Cluster Development Scheme (CHCDS) - Formation of Consortium/SPV - Mobilization of weavers

    Comprehensive Handlooms Cluster Development Scheme (CHCDS)


    5.2 Formation of Consortium/SPV - Mobilization of weavers

    With introduction of economic reforms through liberalization, privatisation and globalisation, India has entered into a new era of economic development and therefore, formation of Consortium/SPV Empowerment programme for handloom weavers is necessary by making them active entrepreneurs-cum primary stake holders of development and bringing them to a visible platform so as to enhance their operational efficiency and competitiveness to face the new challenges and make them viable and self supporting economic entity This activity shall include mobilizing the weavers into groups in the form of SHGs, training of SHGs etc.


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    Thumbs up Comprehensive Handlooms Cluster Development Scheme (CHCDS) - Technology Up-gradation

    Comprehensive Handlooms Cluster Development Scheme (CHCDS)


    5.3. Technology Up-gradation

    Design development and technology up-gradation in handlooms sector is entirely different from that of small-scale industries. Handloom weaving is manual and highly complicated involving numerous processes and it is also very individualistic and local and differs from region to region. Each place has its traditional ways of production. It would, therefore, be essential to study the present weaving practices adopted in the cluster and recommend the better technology available for the looms, which enhances the production and improves the quality and reduces the cost of production and fatigue and on the other hand, increase the level of incomes of the weaver. Assistance would, therefore be given under the scheme for modernization/up-gradation of the pre-loom, on-loom and accessories.

    The share of assistance by GOI is upto 80% and the remaining 20% by the SPV/beneficiaries/stakeholders/State Govt. However, the contribution of the State Government will not exceed 10%.


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    Thumbs up Comprehensive Handlooms Cluster Development Scheme (CHCDS) - Design Development and Product Diversification

    Comprehensive Handlooms Cluster Development Scheme (CHCDS)


    5.4. Design Development and Product Diversification

    It has been recognized that design is a strategic tool that can provide directions to the crafts in a rapidly changing market environment. Thus, a sustainable linkage amongst designers, technologists, marketers and weavers in diverse materials and locations through acceptable programmes at all levels need to be established for promotion and development of handlooms. Assistance will be given under the scheme for upgrading and diversifying the present product range through design development, quality improvement so as to meet the needs of the contemporary market requirements. Assistance will also be provided for setting up a Design studio with Computer Aided Textile Design System and a professionally qualified Designer.

    Towards creating infrastructure for the Design Studio, including the CATD System, the share of assistance by GOI is upto 80% and the remaining 20% by the SPV/beneficiaries/stakeholders/State Govt. However, the contribution of the State Government will not exceed 10%. While the assistance towards engaging the designer will be fully borne by GOI.


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    Thumbs up Comprehensive Handlooms Cluster Development Scheme (CHCDS) - Corpus for Raw material

    Comprehensive Handlooms Cluster Development Scheme (CHCDS)


    5.5. Corpus for Raw material

    The handloom industry in India consumes diverse range of yarns from natural viz. cotton, wool, silk, jute to artificial viz synthetic, cellulose and multiple blends of such yarns to produce different varieties catering to the needs of the different segments of the society both in the domestic and overseas market. Yet, the major problems faced by the handloom sector are availability of raw materials at reasonable price & quality. Considering the significance of raw material to the finished product, it is imperative to augment the availability of different varieties of yarns of acceptable quality at reasonable prices to provide a platform to the value added textile products. It would, therefore, be essential to open yarn depot(s) in the Mega clusters so as to ensure timely supply of quality yarn, dyes and chemicals to the handloom weavers/societies.

    Assistance for setting up a depot as well as a revolving fund for purchase of raw materials and operating expenses will, therefore, be given under the scheme. A corpus fund of Rs.5.00 cr. will be created for regular supply of yarn through National Handloom Development Corporation, Lucknow in the Mega clusters.


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    Thumbs up Comprehensive Handlooms Cluster Development Scheme (CHCDS) - Credit for working capital

    Comprehensive Handlooms Cluster Development Scheme (CHCDS)


    5.6. Credit for working capital

    The credit requirement of weavers is the primary and most important factor that needs to be addressed immediately. The organized set up has predominantly supported the weavers only in the cooperative fold, which also at present is in a very precarious shape. Weavers outside the cooperative fold, however, have not received attention from the Government and the large percentage of weavers are either deprived or do not have access to institutional credit. These weavers mainly depend on the Master Weavers and traders who exploit in many ways including charging of exorbitant rate of interest. It is, therefore, imperative that funds are made available to the weavers for accelerating growth in the handloom sector. At the same time, the cost of credit is high, which adds to the cost of handloom products and makes it uncompetitive vis--vis powerloom products.

    Assistance in the form of margin money/working capital will also be given to ensure better access and availability of credit through formal banking system and micro finance institutions. Assistance upto 5% of the project cost will be provided for margin money during the project period.

    To provide the credit at concessional rate of 7% p.a., subvention of 5% will be provided to the lending Institutions. Assistance upto Rs. 5.00 cr. will be provided for subvention during the project period.


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