April 15, 2021: The Powertex India scheme is a comprehensive scheme launched by the Ministry of textiles. It aims to empower the powerloom sector’s development simultaneously at over 45 locations in the country.
The Powertex India Scheme
Established in 2019, the scheme has various sub-schemes provided under it, which tackle multiple issues faced by India’s textile sector. It is an all-inclusive scheme made for the development of the power loom sector, which further addresses the unheard needs of the power loom sector—the Union Textiles Minister Smriti Irani had launched the scheme for developing the knitting and knitwear sector.
The already introduced schemes are now modified with additional components, and new projects are also added to develop the industry further. This scheme aims at boosting the already existing infrastructure and encourage the adoption of modernisation in the power loom sector at an even larger scale.
Indian powerloom sector accounts for 80% of the woven fabric production, 60% of the total fabric production. It provides direct jobs to 63 lakh people, especially those below the poverty line, rural masses and women folk. The powerloom sector has around 25.2 lakh looms.
This sector predominantly meets the entire population’s clothing needs in the country apart from fetching sizeable forex earnings directly and indirectly. Hence, the competitiveness of the textile industry across the value chain dramatically depends on the powerloom sector’s performance. So, both the Central and State governments have been giving importance to this sector’s growth and sustenance.
Challenges faced by the powerloom sector
During the last seven years, the powerloom sector has been facing numerous challenges regarding sluggish global and domestic market conditions. Though the capacity has increased by 12% during the last seven years, fabric production has increased only by 2.4%. The GST Plus agreement entered by Pakistan with the EU during 2013-14 had a significant impact on India’s power loom fabric exports due to the 9.6% duty advantage given for Pakistan.
Also, the high production cost, labour shortage, transport cost, 5% State VAT, mass closure of dyeing units, exorbitant cost of modern technology machines, high cost of manmade fibre, hank yarn obligation, Handloom Reservation Act, etc., continue to be significant challenges faced by the powerloom sector.
Though the Central Government has already extended numerous schemes, including TUF subsidy, subsidy for conversion of non-automatic and semi-automatic looms, yarn bank facility, etc., the powerloom sector continues to struggle.
Against this background, the powerloom sector and The Southern India Mills’ Association (SIMA) have demanded the Central Government announced a particular scheme for the powerloom sector. Now the unique project has been announced through Powertex India.
List of sub-schemes under Powertex India scheme
Given below is a comprehensive list of all the sub schemes under the Powertex India Scheme, along with their primary objectives:
In-situ upgradation of plain powerlooms: The prime goal of the project is to upgrade existing plain looms to semi-automatic/shuttleless looms to improve the quality and productivity of the fabric being produced by way of fixing specific additional attachments/kits and enable them to face the competition in domestic and international markets, by way of providing financial assistance to economically weaker low-end powerloom units.
Group Workshed Scheme: The prime objective of the scheme is to establish Group Work Sheds for shuttleless looms in an existing or new cluster, which will provide the required scale of economy for business operations. Further, it aims to organise powerloom units in a cluster and provide improved working conditions in terms of more space, work environment, and work efficiency to enhance their competitiveness in the global market.
Yarn Bank Scheme: To enable small powerloom weavers to purchase the yarn at wholesale rate and large quantities by avoiding middle man/local supplier’s brokerage charges by providing interest-free corpus fund to Special Purpose Vehicle (SPV)/Consortium of Powerloom weavers.
Common Facility Centre: To establish Common Facility Centres (CFC) in various powerloom clusters and provide pre-weaving, post weaving and other infrastructure facilities to powerloom weavers/units, powerloom industry associations and other organizations allied with the powerloom industry by providing financial assistance for the setting up of Common Facility Centres (CFC).
Solar Energy Scheme for powerlooms: The prime objective of the scheme is to alleviate the problem of power cut/shortage, being faced by the decentralised powerloom units in the country, to improve utilization, efficiency, productivity etc. to meet both domestic and international markets competitively by providing financial assistance/capital subsidy to small powerloom units for installation of Solar PhotoVoltaic (SPV) plant.
Pradhan Mantri Credit Scheme for powerlooms: To provide adequate and timely financial assistance to the powerloom weavers to meet their credit requirements, investment needs (Term Loan) and working capital flexibly and cost-effectively.
Grant-in-Aid and Modernisation & Upgradation of Power loom Service Centres (PSCs): To enable Powerloom weavers in various clusters to avail Powerloom Service Centres’ services. Textile Research Associations (TRAs)/State Govt. agencies are running 32 no. of PSCs located across the country and providing various services like training, sample testing, design development, consultancy, conducting seminar/ workshop, etc. to the powerloom sector on behalf of the GoI. The Grant-in-Aid (GIA) provided to the PSCs of TRAs/State Govt. agencies are mainly for the recurring expenses for running the PSCs for providing the services to the powerloom sector. The Govt. assistance will be provided for the modernization of the existing infrastructure etc. Powerloom Service Centres and other facilities required in the cluster for standard services.
Tex Venture Capital Fund: To assist the Powerloom and allied units under the MSME Sector for boosting their net-worth, leverage commercial bank debt, improve their manufacturing capacity and sales turnover, increase competitiveness and profitability by way of investment in the equity shares and instruments convertible into equity of textile units through Tex Venture Fund. The fund would operate under the Securities Exchange Board of India’s Alternative Investment Fund Regulations 2012 (SEBI’s AIF Regulations 2012).
Facilitation, IT, Awareness, and Publicity for Power loom Schemes: Facilitation services to powerloom weavers like Helpline, Registration services, SMS Alert, Bank services etc., Online Portal for Powerloom Schemes, create awareness about schemes, disseminate the information about technology, products for the benefits of powerloom weavers/workers, provide a platform for powerloom weavers to market their products at the cluster level, regional level, national and international level and publicity of powerloom schemes in Electronic and Print Media.