The Government of India has approved Revival, Reform and Restructuring (RRR) Package for Handloom Sector in November 2011, to waive off the overdue loans of primary weavers cooperatives, other weavers organizations and individual weavers and to provide access to subsidized institutional credit. The requests/recommendations seeking more concessions and relaxations under RRR package have been received afterwards.
The RRR package aims at waiving the overdue loans and interest (100% principal and 25% interest is borne by the Govt. of India and 75% interest and penal interest, if any, is borne by the banks) to eligible handloom cooperative societies and individual weavers as on 31.3.2010, and provides fresh credit with interest subsidy of 3% for 3 years with credit guarantee to the societies and weavers which are being benefitted under the RRR package. For implementation, the States were asked to carry out the statutory audit of handloom cooperatives and carry out the legal and institutional reforms of handloom cooperatives.
Then, NABARD carried out special audit of handloom cooperatives to assess the loan waiver and recapitalization assistance to eligible viable and potentially viable cooperatives as per guidelines of the scheme. The viable and potentially viable apex and primary cooperatives are eligible for the benefit under the package. In case of individual weaver, overdue loan upto Rs.50000/- taken for weaving related activities is eligible for waiver.
The banks have been charging applicable rate of interest for loan as per RBI guidelines from handloom weavers. In order to provide subsidized credit to handloom weavers, the Government of India has approved institutional credit component under Integrated Handlooms Development Scheme. Since then, the Government is providing margin money assistance @ Rs.4200/- per weaver, 3% interest subvention for 3 years and credit guarantee through CGTMSE for 3 years.
Besides, fresh credit with interest subsidy of 3% for 3 years and credit guarantee through CGTMSE for 3 years is also provided to the societies and weavers which are being benefitted under the RRR package. Further, loan for handloom sector at 6% interest rate has been announced by the Finance Minister in the budget for 2013-14.
The revised proposal of RRR package has been formulated in view of representations/recommendations received from State Governments including Andhra Pradesh, Tamil Nadu, Kerala, Himachal Pradesh, Bihar, Manipur, Odisha, Karnataka, Uttar Pradesh, West Bengal, Uttrakhand and Maharashtra.
Eligibility norms of “viable” and “potentially viable” societies
Viable Apex & PWCs are identified based on the following norms/criteria.
(a) Capacity utilization during the last 3 years should have been equal or more than economic level of operation (Break even level).
(b) Net Disposable Resources (NDR) and net worth should be positive.
(c) Sales should be at least to the extent of 75% of average production for the last 3 years.
(d) Audit may be completed upto for the year 2009-10.
(e) Working capital/Cash credit limit should be rotated at least twice in a year.
Potentially viable Apex & PWCs are identified by the following norms /criteria:
(a) Net worth should be positive but incurring operative losses in not more than two of last three years. (Amended as four out of 5 years, vide order dated 11.6.2012.).
(b) Sales should be at least to the extent of 50% of average production for last 3 years.
(c) Audit may be completed upto for the year 2009-10
(d) Working capital/Cash credit limit should be rotated at least once in a year. (Relaxed – to the extent that the societies should have not been sanctioned cash credit limit by the bank for past 2 years. Like-wise, if the society has not been sanctioned such credit limit by the bank for past 2 years and it is operating from their own through some Bank account could be considered, vide order dated 11.6.2012.)
Source:
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