The Hindu Business Line : Rebate scheme for handlooms reintroduced

The Ministry of Textiles has announced reintroduction of rebate scheme on sale of handloom products sold by handloom agencies, which would help market handloom products worth Rs 1,000 crore.

According to an official release issued here, the Cabinet Committee on Economic Affairs (CCEA) gave recently its approval for reintroduction of the "Scheme for reimbursement of one time rebate at 10 per cent given by the handloom agencies on sale of handloom cloth" for a span of three years beginning from 2006-07 with a budget provision of Rs 100 crore, spread over Rs 20 crore during the current fiscal and the rest Rs 80 crore apportioned by Rs 40 crore a year. With the assistance being extended under the scheme, the handloom agencies would be in a position to sell their unsold handloom cloth faster by giving rebate to the consumer. The scheme would be implemented through the state governments.

It might be noted that with a view to augmenting marketing of handloom products in the wake of stiff competition from powerloom and mill sectors, the Government had approved the introduction of the 10 per cent rebate scheme on January 15, 2004 with a budget provision of Rs 100 crore for implementation up to March 31, 2005. The implementation of this scheme helped the handloom sector to market handloom products worth Rs 957 crore and reduced their inventories/accumulated stocks.

This scheme was discontinued after March 31, 2005.

However, bowing to the demands of the state governments, which had been raising the issue of reintroduction of the rebate scheme to help the handloom sector in marketing of handloom products, the Textile Minister Mr Shankar Sinh Vaghela took up the matter and got CCEA clearance for its reintroduction. The scheme is 100 per cent funded by the Central Government.