Welfare of Handloom Sector

The handloom sector received a boost with the government’s help. NIFT in association with government had undertaken a project for the creation of new designs worth Rs 4 crores. Apart from the Centrally Sponsored Schemes, there are also State schemes, which are fully designed and funded by the State governments. Andhra Pradesh has 29 of these State schemes. Almost all schemes are implemented by the Directorate of Handlooms and Textiles, which has a head office in Hyderabad and offices in all district head quarters. One of the main Centrally Sponsored Schemes is the DeenDayalHathkarghaProtsahanYojana, usually called just DeenDayal Scheme.

It was launched in 2000–1 and was actually a follow-up and merger of several existing schemes. It is meant to benefit both weavers within and outside the cooperative fold, and the main objectives are to help weavers to develop their products and to support them with infrastructure, training, equipment etc. In short, to prepare and integrate them better in a changing market environment. The DeenDayal scheme is meant especially to help the more competitive sub-sector within the handloom sector, a sub-sector which does not require any help at all – it will do well anyhow and does not need NGO or government involvement.
The government has planned to establish a textile park to modernise and revive the handloom sector in the state, the issue of the textile park has been taken up with the centre following a proposal from AP handloom weavers’ co-operative society (APCO). Mr. Naidu also called for single-point taxation with respect to duties levied on textile exports.


APCO and the primary cooperatives were the main institutional channels through which subsidies and credits reaches the weavers, but in the recent past this has changed and several centrally sponsored schemes are now also open to weavers outside the cooperative fold.

It is, however, more complicated to reach these weavers and the Directorate of Handlooms and Textiles also seems to be more tuned to work through cooperatives than through other bodies. Recently, APCO has repaid a part of the dues to the cooperative societies. Also there was a proposal in preparation to restructure the cash credit repayment. In total, the cooperative societies owe the AP Cooperative Bank something like 100 million rupees. This is the total sum of the cash credit that the societies have taken from the bank and could not repay because APCO did not pay them, plus the accumulated interest. The proposal that is being prepared is to convert the existing cash credit into a loan, to be repaid in ten years, and to revive the cash credit, so that, in any case, the cooperatives would be able to get some new working capital.

Another recent activity is to revive and modernise APCO with the help of a package developed by the National Institute of Fashion Technology (NIFT). The NIFT has carried out surveys of weavers and has worked on new and hopefully marketable designs. It has arranged links with large retail stores – Shopper’s Stop, Pantaloon and Life Style. The package, it is hoped, would help APCO to adjust to the upper-middle class consumer market and to improve its financial situation. The costs, Rs. 400 million, will be shared by the Union and the AP State government.

As mentioned above, APCO is given some money to repay part of the money it owes the cooperative societies,15 but the basic set-up remains intact and constraints on cooperative societies continue to exist.