CCEA Approved The Continuation of MGPS

The Cabinet Committee on Economic Affairs (CCEA) has approved the continuation of the Mill Gate Price Scheme (MGPS), along with 10 percent subsidy component with modifications. The scheme is now renamed as the Yarn Supply Scheme (YSS).

During the 12th Five-Year Plan period (2012-17), the outlay for YSS would be Rs. 4.43 billion, according to a press release.

Under the scheme yarn at subsidized prices will be provided to weavers from underprivileged sections and vulnerable groups, to enable them to compete with the powerloom and mill sector.

During the 12th Plan period, the Government has set a target to supply 350.6 million kg yarn worth Rs. 43.64 billion under the YSS. The beneficiaries under YSS have been fixed to serve all 2.3 million handloom units operating in the country, the release said.

At present, 10 percent subsidy on mill gate price is payable to cotton yarn and domestic silk with quantity restrictions. Under the new scheme, for cotton yarn up to and including 40s, restriction would be 30 kg per loom per month, and for yarn above 40s, the restriction would be 10 kg per loom/month. However, for domestic silk, quantity restriction would remain unaltered at four kg per loom/month.

Along with hank yarn and domestic silk, 10 percent subsidy will also be applicable to wool for individual weavers and weavers’ cooperative societies. For woollen yarn below 10s NM, the maximum limit would be 50 kg per loom/month, for woollen yarn 10s to 39.99s NM it would be 10 kg per loom/month, and for woollen yarn 40s NM and above the limit would be 4 kg per loom/month.

In addition, the National Handloom Development Corporation (NHDC) has proposed to open distribution centres/warehouses in various parts of the country to increase the coverage of primary weavers’ societies and individual weavers and also to introduce cash sale of yarn, especially to small weavers instead of payment of advance to precede indenting and supply of yarn with a gap of about 15 to 45 days. Initially, 10 such distribution centres would be set up by the NHDC.

Further, service charges to NHDC are proposed to be enhanced by 0.5 percent in all the states, the statement said.

The Government of India has been implementing MGPS since 1992 for making yarn available to handloom weavers at mill gate price by reimbursing transportation charges to depot operating agencies, which are primary weavers’ cooperative societies, apex societies and other handloom organizations.