The Hindu Business Line : Powerloom sector on recovery path

The sector, which is highly fragmented and decentralised in nature, has been taking advantage of schemes such as the newly released 20 per cent capital subsidy scheme, low cost power, and Technology Upgradation Fund (TUF).

While powerloom owners have trouble accessing funds from banks, a source said that areas such as Ichalkaranji and Vada are increasing the number of looms at a fairly rapid pace with help from the 20 per cent capital subsidy scheme.

The overall trend was that old machines were being replaced and even the size of individual units was expanding.

The 20 per cent capital subsidy scheme offered to small-scale industries has attracted 185 applications for the period April 1, 2004, and ending February 28, 2005, an industry representative said.

The total cost of machinery was Rs 64 crore of which the subsidy amounts to Rs 12 crore. However, only about Rs 8 crore will be disbursed for the year ending March 31, 2005, because the invoice prices submitted by SSIs are likely to vary widely from those on the Government's price list.

Since the scheme's guidelines were only notified in January 2004, only Rs 9.67 crore was disbursed for the year ended March 31, 2004.

According to a senior bureaucrat, modernisation has been a slow process in Bhiwandi and Malegaon because in many cases loom ownership is in doubt, which prevents them from getting a bank loan or TUF funds.

Before 2000-01 there were roughly 5,000 shuttleless looms in the country. But with much encouragement being shown to the textile sector and access to the TUF, there are now roughly 25,000 shuttleless looms in the decentralised segment.

Under the TUF scheme, for the 5 per cent interest reimbursement scheme, SIDBI received 396 applications from SSIs of which 389 were sanctioned and funds disbursed to 311 parties between April 1, 2004 and December 31, 2004.

The project cost was Rs 206 crore, the amounts sanctioned Rs 123 crore and Rs 94 crore was disbursed.

In the last year, the powerloom segment, which is about 18 lakh looms strong countrywide, bought 200 indigenous semi-automatic looms, 94 indigenous automatic looms, 36 imported automatic looms and 78 indigenous shuttles rapier looms. Among the imports were 333 rapier looms, 47 projectile looms, 128 waterjet looms and 24 airjet looms.

However, SSI entrepreneurs are even importing looms without Government assistance. Some of them are even older than 15 years. Machines have to be at least 10 years old for SSIs to get Government assistance.

Maharashtra attractive: Some powerloom players from Gujarat are even trying to set up more units in Maharashtra because the State Government here has been offering power at Re 1 per unit.

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