Union Ministry of Textiles to give a major fillip for modernization in the weaving sector a programme has been launched called the ‘Hire-Purchase Scheme’ in the revised restructured Technology Upgradation Scheme (RR-TUFS). A special purpose vehicle (SPV), promoted by a group of weavers, a large-scale textile manufacturer and a co-operative or an entrepreneur, will procure the machines and provide them on a hire-purchase basis to the weavers.

Lease rent attracts 12 per cent service tax, and this should be removed for the scheme so that the SPV can lease out the looms to the weavers.

New indigenous or imported shuttle-less looms and pre-weaving machinery will be eligible for 30 per cent subsidy under this scheme apart from interest subsidy. Details of the ‘Hire-Purchase scheme’ are given in the Government resolution on the RR-TUFS that was issued recently for the XII Plan period. It will be a pilot project with an outlay of Rs. 300 crore, and will be monitored by the Office of the Textile Commissioner.

According to D.K. Nair, Secretary-General of the Confederation of Indian Textile Industry, the weaving sector is one of the weakest links of the textile value chain in the country.

The average size of a powerloom unit is 12 to 16 looms. The cost of an imported, first-hand shuttle-less loom with preparatory machinery, is more than Rs. 40 lakh. Many small-scale powerloom units cannot afford to invest in bulk to upgrade to shuttle-less looms.

M. Senthil Kumar, Deputy Chairman of the Southern India Mills’ Association and Chairman-cum-Managing Director of the Palladam Hi-Tech Weaving Park, told The Hindu that weavers who were unable to give a project for bank loan to modernise the units would benefit from this. The scheme gives them the opportunity to invest over a period of time and modernize at least a part of their weaving facility.

The country has nearly 22 lakh powerlooms, and just about a lakh shuttle-less looms..