Revival, Reform and Restructuring Package for Handloom Sector
Revival,Reform and Restructuring Package is Implemented by the Ministry of Textiles. Under National Handloom Development Programme (NHDP) to be implemented during the XII Plan has been formulated as a centrally sponsored plan scheme approved by the Planning commission merging, with or without modifications, Revival, Reform and Restructuring (RRR) package, Institutional Credit component of Integrated Handlooms Development Scheme (IHDS) as Concessional Credit and Comprehensive Handlooms Development Scheme (CHDS).
CHDS, a component of NHDP, has been formulated by merging three plan schemes i.e.
- Integrated Handlooms Development Scheme,
- Marketing & Export Promotion Scheme, and
- Diversified Handlooms Development Scheme implemented during 11th Plan.
Revival,Reform and Restructuring Package – Background of the scheme
Acknowledging the financial distress faced by handloom weavers and cooperatives due to their inability to repay debts, the government announced a financial package of Rs.3000 crore for the handloom sector on 2011.
To give effect to this announcement, the scheme named „Revival, Reform and Restructuring (RRR) package for the handloom sector‟ was approved by CCEA on 2011, and according guidelines of the RRR package were issued on 28.11.2011. NABARD is the designated implementing agency of RRR package.
The modifications in the guidelines of RRR package have been carried out so as to overcome the practical difficulties experienced in implementation of the scheme and to cover more apex societies, primary weaver cooperative (PWC) societies and individual weavers under the package. The revised scheme would also facilitate cheaper credit @ 6% of interest to the handloom sector in line with the Budget announcement 2013-14.
Revival,Reform and Restructuring Package – Salient features
The “Revival, Reform and Restructuring Package for Handloom Sector” will now be implemented as a component of new centrally sponsored plan scheme National Handloom Development Programme (NHDP).
The funds required for loan waiver and recapitalization of handloom weavers cooperative societies and individual weavers will be shared in the following ratio between the Government of India and States concerned
There would be an overall ceiling of Rs. 50,000 per individual beneficiary as far as funding under this scheme is concerned in respect of waiver of overdues of individual handloom weavers.
The Government has further approved concessional credit at 6% interest rate for 3 years to be extended from the date of disbursal of the fresh loan extended by banks to the eligible handloom cooperative societies and individual handloom weavers covered under RRR package.
The quantum of interest subsidy to be borne by the GOI will be limited to the difference between the actual rate of interest as applicable /charged by the Banks and 6% interest to be borne by the borrower. The maximum interest subvention would be capped at 7%.
The interest subvention would not be available after the date on which a loan becomes non-performing asset (NPA).
The Government will make necessary provision towards payment of Guarantee Fee @1% and Annual Service [email protected]% to be paid to CGTMSE, for credit guarantee for a period of three years from the date of first disbursal of the fresh loans.
The Government has further approved the constitution of three levels of Committees at the national, state and district levels for implementing and monitoring the scheme.