The Union ministry of textiles to provide powerloom weavers yarn at concessional rate has formed two special purpose vehicles (SPVs) namely Ved Road Art Silk Small Scale Cooperative Federation Limited and Pandesara Weavers Cooperative Society Limited for setting up India’s first yarn bank under the Integrated Scheme for Powerloom Sector Development ( ISPSD).

With the initial corpus fund of Rs 1 crore each, of which 50 percent allocated by the central government and 50 percent by the SPV these yarn banks will start for purchasing yarn from the open market and selling at concessional rates to its initial 1,000 member weavers.

With the setting up of yarn banks at the powerloom clusters of Ved Road and Pandesara, hundreds of small and medium powerloom weavers in Surat, the largest man-made fabric ( MMF) centre of India will have direct access to polyester yarn at concessional rates.

Both the yarn banks will be inaugurated in the presence of textile secretary Sanjay Panda and joint secretary Sujit Gulati at a function on Friday.

According to the textile experts, the yarn banks will provide an opportunity to the weavers to arrest the price fluctuations and curb the presence of the middlemen, known for hoarding the yarn stocks and engineering artificial price hikes and shortages. Moreover, the yarn banks will allow the weavers to procure yarn on credit and repaying the amount in installments or adjusting against the quantity of yarn bought every month.

Devesh Patel of Ved Road Art Silk Small Scale Cooperative Federation Limited said that there are more than 1 lakh weavers in Ved Road and Pandesara. Initially, the yarn bank will be catering to only 100 units from both the areas. They have urged the textile ministry to increase the corpus fund to a minimum of Rs 5 crore each to the banks, so as to cater to a large section of weavers.

They have started approaching the frontline spinners like Reliance Industries Limited (RIL) for the bulk procurement of yarn on concessional rates. If this works out then they will not have to depend on the local suppliers and weavers would be getting yarn cheaper by 7-8 per cent.

According to Ashish Gujarati of Pandesara Weavers' Federation, as there are several kinds of yarns produced across the world through the yarn bank domestic industry can get access to various yarn samples of global standard which will be stored there to do further research and come out with innovative products. The yarn bank will also provide price benefits.

There are 5.5 lakh powerloom machines in Surat producing around three crore meter of fabrics every day. The powerloom sector employs around seven lakh textile workers.