Handloom in Union Budget 2010-11
I4handloom
Neglect of handloom sector continues, this year also. As you can see
below, the allocations do not match the needs and requirements of
handloom sector.
I am uploading a document into the files section for you to download,
read, digest and take up necessary action.
with best regards.
d. narasimha reddy
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Killing Handloom Sector through Public Policies
Handloom Sector in Union Budgets
Summary
Handloom sector has a turnover of Rs.60,000 crore per year. Handloom
products have a market demand of Rs.100,000 crore per year. Handloom
exports have reached Rs.4000 crores per year. More than 3 crore people
are dependent on this sector. It is eco-friendly production, which has
all the technological capacities within the country. No royalty needs
to be paid to Western countries in this period of concern over carbon
emissions and climate change.
Handloom sector invests more than Rs.25,000 crores on accessing cotton
yarn, and Rs.9,500 crores on dyes and chemicals every year. Handloom
production is dependent on private money lending to the tune of Rs.
35,000 crores, and pays interests between 18 to 24 percent. Handloom
sector gets a paltry budget allocation of Rs.328 crores. Given the
employment potential and its contribution to GDP, government has to
increase the budget allocation to atleast Rs.5,000 crores, and ask
NABARD to increase the credit availability for handloom sector from
the current Rs.75 crores to Rs.10,000 crores.
• There is a need for higher allocations for handloom sector, given
the growth and employment potential.
• Handloom budget is a mere 0.03 percent of the national budget
2010-11. It was 0.3 and 0.4 percent in the past two years. Thus, there
is continuous decline in real terms.
• Investment on handloom sector per metre is a mere 48 paise in
2008-09, while for the non-handloom 62 paise.
• Other than budget allocations, government provides tax breaks,
subsidies and incentives of MAITI (modern, automated Indian Textile
Industry). This exceeds Rs.1,00,000 crore in the last nine years.
• In the last 13 years, budget allocation for handloom has been
decreasing gradually and continuously. It does not get even the
normal, automatic inflationary increase of 10 percent, year on year.
• While there is continuous reduction in the allocations for
handlooms, utilization of the allocation is also not proper.
• Though the average downsize revision is 6.4 percent for eleven
years, per year the variation ranges from 4.0 percent to 23.5 percent.
• The downsize revision in more for handlooms than for non-handloom
sector.
• In a span of ten years, the growth rate of handloom allocations was
a mere 18.4 percent. In the same period, the growth rate for total
textile budget was whopping 313.3 percent.
• Per capita allocation of the government on handloom weavers is very
low, compared to any other sector.
• Government has ignored the recommendation of Working Group on
Handlooms for 11th Five year Plan, which recommended about Rs.4,000
crores.
• It has also ignored the Karmakar Committee’s report for Rs.1294
financial revival package for handloom sector.
• Handloom weavers are facing severe livelihood crisis because of
adverse government policies, globalisation and changing socio-economic
conditions. Suicides are on the rise. Ineffective implementation of
the schemes, increasing unfair competition from the powerloom and mill
sectors are responsible for the crisis.