Handloom unable to use govt help, production data misleading

In spite of getting various incentives from the government, the handloom sector continues to be in a financial mess, hitting thousands of workers employed by the industry.

In spite of getting various incentives from the government, the handloom sector continues to be in a financial mess, hitting thousands of workers employed by the industry. While the Ministry of Textiles claims that after a five-year slump, handloom production has seen a 10 per cent growth in fiscal 2006, the actual production may be much below than what it claims.

The ministry does not have a mechanism in place to gauge the actual production of handloom. Relying on a conversion ratio which has not been revised for over a decade now, the handloom production is calculated back from the overall cloth production.

The ministry8217;s refusal to review the conversion ratio from time to time has resulted in bloated figures of production in the sector which forms the basis of major policy decisions.

Two existing policies 8212; the hank yarn packing obligation scheme and the Handloom reservation of articles for production Act 8212; which were formulated to insulate the impact of powerloom and create a constant demand for handloom products, are not helping in a post-quota era.

At the time of the introduction of the hank yarn obligation scheme in 1974, availability of yarn for handloom was scarce and the move was to ensure a steady supply. The scheme notified that all mills were bound to produce 40 per cent of their capacity as hank yarn to be consumed by the handloom sector.

But with the sector in a recession, the scheme now ensures a huge surplus of yarn which could have been directed to the more profitable powerloom sector. 8216;8216;The hank yarn obligation has outlived its utility and should be done away with ideally. Earlier hank yarn used to attract lower excise duty but now the duties across the board have been reduced considerably and availability is no longer a problem,8217;8217; said a textiles ministry official.

The removal of quota last year saw import of such products surge from neighbouring countries like Pakistan and Bangladesh. Due to the sector8217;s inherent disadvantages vis-a-vis powerloom, Indian handloom is losing out to the powerloom in the neighbouring countries.

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Officials in the ministry authenticate the trend but add that the sensitivity of the issue is the reason for the government8217;s silence in the matter. 8216;8216;The sector is not doing too bad but the act does not help anymore,8217;8217; said an official.

The industry says that it8217;s the powerloom sector that is the actual loser here. 8216;8216;The government8217;s redundant policies are doing more harm than good to the sector. When you cannot control imports any more why not create a level playing field and allow the powerloom sector here to manufacture such products as well,8217;8217; said an industry insider.