Yarn Supply Scheme

Yarn Supply Scheme

Yarn Supply scheme is to make available of all types of yarn at Mill Gate Price to the weavers 

Yarn Supply scheme is implemented by National Handloom Corporation of India. Handloom is a labour intensive occupation spread throughout the country, mostly in villages.

The handloom sector employs over 43 lakh persons in weaving and allied activities (as per handlooms census of India 2009-10).  

Need for Yarn Supply Scheme

The main raw material used by this sector is yarn, which is being produced by spinning mills.

The yarn trade was controlled by the traders and most of the handloom weavers were dependent on the traders for their yarn requirement.

This had resulted in unchecked escalation in yarn prices and shortage in its availability. Government of India had felt the need for the formation of a national level apex body to overcome those problems by effective intervention in the yarn market and therefore, set up the National Handloom Development Corporation (NHDC) Ltd., a Government of India undertaking in 1983.

National Handloom Development Corporation

The main objective of NHDC is to make available to weavers throughout the country, yarn of the appropriate and required quality, through a well-ordered system.

Government of India introduced a scheme for Supply of yarn at the price in which it is available at the Mill Gate in 1992.

Under the scheme the transportation expenses involved in supply of yarn are reimbursed by the Government of India. The nodal agency for the implementation of this scheme is NHDC.

Implementation of the Mill Gate Price Scheme, it has been considered appropriate to merge the component of Investment in NHDC with the Mill Gate Price Scheme.

The Government of India has included one more component of 10% Price Subsidy on Domestic Silk and cotton Hank Yarn under Mill Gate Price Scheme during 2011-12 to ensure availability of cheap yarn to Handloom Sector.

Yarn Supply Scheme has three components, 

(i) Supply of yarn at Mill Gate Price

Related Topics  Sub-categorization of Other Backward Classes (OBCs)

(ii) 10% Price Subsidy on cotton hank yarn, domestic silk and wool

(iii) Investment in NHDC.



The objective of this component is to make available all types of yarn at Mill Gate Price to the eligible handloom weavers so as to facilitate regular supply of basic raw materials to the handloom sector and help utilize the full employment potential of the sector.


The agencies which will be eligible to avail of the benefit of the scheme will be as under:

a) All handloom organizations (including weaver co-operative societies) at National/ State/ Regional/ Primary Handloom level.

b) Handloom Development Centres.

c) Handloom producers/manufacturers exporting directly and registered with HEPC/ any other Export Promotion Council under Ministry of Textiles/Director of Industries/Handlooms of State/U.T.

d) The Consortium/producers Company formed in the handloom clusters sanctioned under IHDS/IHCDS/Mega Clusters/Integrated Handloom Textile Parks.

e) Members of recognized/approved handloom associations.

f) NGOs fulfilling CAPART norms.

g) Self Help Groups/ Joint liability Groups.

h) Individual weavers and Weavers entrepreneurs.

Comprehensive Handloom Cluster Development Scheme

Raja Raja Cholan
About Raja Raja Cholan 659 Articles
Trainer & Mentor for aspirants preparing for civil service examination

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