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REGISTERED No. D-(D)-72

THE GAZETTE of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 212] NEW DELHI, FRIDAY, OCTOBER 24, 1975/KARTIKA 2, 1897

Separate paging is given to this Part in order that it may be filed as a separate compilation

MINISTRY OF COMMERCE

(Department of Export Production)

RESOLUTION

New Delhi, the 24th October 1975

SUBJECT.—Revitalisation and development of handloom Industry

No. 4/59/74-TEX.IV.-The Government of India set up on the 29th December, I973, by their Resolution No. 4/100/73-TEX.IV,a Study Team under the Chairmanship of Shri B. Sivaraman, to study in depth the problems of Handloom Industry and the weavers in order to suggest a programme for Development of this sector in the Fifth Plan period. The composition of the Study Team was as follows :—

(1) Shri B. Sivaraman, Vice Chairman, NationalCommissioneron

Agriculture and Member, Planning Commission, New Delhi

Chairman

(2) One representative each of the Government!) of—

(I) Andhra Pradesh Member (II) Assam (III) Jammu & Kashmir . . . . . .. (iv) Karnataka (v) Maharashtra (vi) Manipur (vii) Tamilnadu (viii) Uttar Pradesh

( 1 3 6 3)

(3) Shri Konda Lakshman Bapuji, Jayatmrttyam, 6-1-2/1, Sec-

retariat Road, Hyderabad-500004 Members

(4) Shri Abid AliAnsari,M.L.A.,Mohal&Nomantulla, Situpur,

District Sitapur (U.P.)

„

(4) Smtf. r^jptil Jayataf, Chairman, Handkrafts end Hrtdtooms B"p"tts Cofponttion Ltd.j Lok Kalyan Bhavan, it-A>R<*ise Avfflnie, New Delhi-uoooi

„

(6) Shrl M. Somappa, President, All India Handtoom Fabrics MarKeting-Cooperative Society Ltd., C/o YemmiMUflur WeaVtts Cooperative Production it Sile Socictj Lid., Vttftffli-

JJ

J a f l n nf

*

••

.

.

.

.

..

(7) S h r i T . R . S. Vijayaraghavachari, Director, Tamllnadu Hand- loom Finance and Trading Corporation Ltd., 85-KhRnpalan, 2nd Street, Madurai-625009

. . • . ,,

(8) Shri S.K. Bagchi, Textile Commissioner, Bombay , . „

(9) Shri Mani Nirayanswami, Joint Secretary, Ministry of Com-

merce, New Delhi

• JJ

(10) Shrl A.N. Varma, Director, Ministry of Commerce, New

Delhi

Member-Secrcrary.

T he Terms of Reference of the Study Team were as follows:—

(i) To suggest programmes for development of the handloom industry in the Fifth Plan ;

(11) To suggest measures for the maximum utilisation of the export potential of the hand- loom sector j

(iii) To suggest m-asurcs for building infrastructure and providing adequate inputs, particularly finance to t he handloom sector ; and

(iv) To review the position regarding reservation and to suggest changes in policy, If n"es$ary.

2. T ae r e p j rt submitted by the Study Team contained 91 main recommendations relating to t hi various probfemi fae=d by the handloom sector and its development in relation to the niifi and the piitf-rloo-n sectors. It also contained 3 dissenting notes—one by the Member re- presenting the G J v e r n m mt of Maharashtra opposing the equation of the powerloom sector to the mill sector, second by the member representing Government of Tamil Nadu urging whole- sale reservations exclusively for halMlloWms of all tfK"e itentt which are at present produced or can b= produced on handlooms and third by another member Shrl Konda Lakshman Bapuji t"tf;cttng dllTiJtfnce df aplniotl almost on all aspects and urging development through coopera- t es only.

3. T^ic r e cin u'ndations of the Study Team along with the comments, etc. received on them frofJ State G)yri-n:nts and other anrtorities, wete scrutinized in depth by an Intcr-Ministeri"l Committee healed by the then Secretary, Department of Export Production in the Ministry of Corafn -rce. Tne decisions arrived at on each of the recommendations as a result of such con- sideration are indicated in Annexurc. In brief Govt. have decided to undertake the following prog-amnes for farther development of the handloom industry during the Fifth Plan period :—

(1) Schemes for extension of cooperative coverage of handlooms to 60% by the end

of the Fifth Plan.

(2) Starting intensive development projects in compact geographical areas having sizable

concentration of handlooms ;

(3) Setting up of a number of export-oriented production centres for Improving the quality

and design of the cloth manufactured for export;

(4) Steps to ensure (a) adequate supply of inputs at reasonable prices and (b) alternative arrangements for provision of credit to primary weavers cooperative societies where central cooperative banks are weak and unable to provide credit ;

(5) Reservation of (i) Yarn-dyed dhoties, (ii) low reed pick cloth, (iil) all coloured sareeSj (iv) Dusters and (v) towels in honey-comb weave of Efazha Thortu for exclusive production in the handloom sector in addition to the present Items of the exclusive reservation, and re-introduction of Tex Mark system for gowerloom cloth.

For the implementation of these programmes, necessary budget provijion is to be made supported by requisite institutional finances, from- year to year. An organisation unfler a Development GomraUsioner for Handlooms is being set up under the Ministry of Commerce to pay continuous attention and achieve effective implementation of the above mentioned programmes. The All

India Handtoom Board will be converted Into a statutory body in course of time. Pending jotting up of the statutory Board, the existing Board will be suitably reconstituted In order to make it a more effective body charged with the responsibilities of coordinating and supervising the Implcracatotioq of th* programmes of development in this sector, with the necessary financial and administrative powers.

4. G^vcrnm Jnt wish to. place on record their great appreiatlon of th" very valuable work donc- by the Study Team in preparing a comprehensive report touching on all aspects of the Hand- loom Industry.

ORDER

Ordered that the Resolution be published in the Gazette of India. Ordered also that a copy of this Resolution be communicated to all State Governments, and^ Union Territory Administrations, all Ministries of the Government of India, the Prime Minis- ter's Secretariat the Private and Military Secretaries to the President, the Planning Commission, Csntral Board of Excise and Customs, and the Comptroller and Auditor General.

ANNEXURB

Statement shaming the decisions token

on fiafldtQam tnaxptry

Organisational Stricture

S.No.

Conclusion

Recommendation

1

a

3

1

Accepted.

Tui AH India Handloom Bpatd should he once again brought back to its premier position as the eyes and the ears of the Government of India in the matter of handloom development. The Castral sector financing should be with the advice o.f this Body. Gontial scheme* and Centrally spon- sored schemos should be monitored by the Board and its advice about modifications should be given due weight.

(Paragraph 2-3)

Accepted in SP far as Centrally G:ntral allocations should be b,ased on an effective utilisaion qf tfje resources given by the Centre and the Handloom Bpard could play an effective part in ensuring that the resources ate usefully spent by the States and the institutions for the approved schemes.

Sponsored Schemes are con- cerned. This will not involve any change in the existing pattern °f financing the State Schemes.

(Paragraph V ?)

Ajcccptcd.

3

A high-powered statutory AHIndja Handloom Board is necessary to dishargc the several functions which that Board has to perform. Till such a statutory Board is set up, it is necessary tp ensure that the present Board effectively takes over the various functions that the Team has postulated for it and that there is effective response from the Ministry to the suggestions of the Board. Therefore, immediately the All-India Handloom Board may be made effective and close liaison with the Mi- nistry and Board established- The Board should set in motion a process of revjpvy and scrutiny of the present situation of the handloom industry in the various States and prepare the ground for effective introduction of the sciwmes proposed by the Study Team.

4

Accepted. The Development Commissioner (Handlooms) would have the Secretarial' Status of Joint Secretary to the Government of India.

A separate Directorate should be created under a Development Commissioner for Handlooms in the Ministry of Commerce charged with the respon- sibility for dealing with handloom alone. Unless concentrated attention is paid to this sector, any large scale improvement in the handloorn sector would not be possible. The Development Com- missioner's organisation should bi helped by tech- nical personnel well versed in the handloom tech- nology.

(Paragraph 2.4)

5 For the proper growth of the handloom sector it is necessary that wherever the handloom population is reasonably large in a State, there must be a sepa- rate Handloom Directorate which shall not be in charge of the power looms since the interests of these two sectors arc contradictory.

Accepted and to be recom- mended for the State Govern- ments' consideration. It was- also appreciated that where the number of handlooms was small and/or matched or out-r numbered by powerlooms, it would be difficult to set up- exclusive handloom directo- rates in such States.

(Paragraph 2.5)

6 The coverage of the weavers' in active cooperative -societies-Should be 60%-of the total by the end of the Fifth Plan period. A purposeful programme had to be taken up to achieve this target on the fol- lowing lines :

Accepted. The Cell will piovid* the Secretariat assistance for the Development Commissio- ner for Handlooms.

(a) Establishment of a Cell in the Commerce Mi- nistry to attend to problems of the handloom cooperatives in some depth. The Development Commissioner for Handlooms may be made ex-officio Commissioner for Handloorrt Coope- ratives ;

Accepted, subject to the Natio- nal Co-operative -Develop- ment Corporation being pro- vided with additional funds on continual and effective basis. The involvement of the Cor- poration will not, however, be on ad hoc basis.

(b) A scheme of rehabilitation of handloom coope- ratives to be undertaken on the same lines as the scheme of rehabilitation of agriculture coope- ratives which was taken up on the advice of the Rural Credit Survey Committee of the Reserve Bank. Societies have to be classified into viable ones, those that can be made viable by supervised credit or by amalgamation and those that have to be wound up. The main ingredient of the scheme of rehabilitation will be the share capital participation of the State Go- vernments. To enable the State Governments to participate in the share capital, the NCDC may be made the body for giving loans to the State Governments for share capital partici- pation.

Accepted-

(c) It is necessary that the Central Banks are made to return the reserves of weavers' co-opera- tives which arc not statutorily required to be retained and some means found to put them into liquidity against the locked up funds in the share capital and government paper. If neces- sary, a Tiding-over Finance in the shape of government share capital should be given to them; and

Accepted.

(d) A closer involvement between the apex mar- keting societies and the primary weavers socie- ties should be established so as to ensure supply of the necessary yarn and other inputs to the weavers and arrange for the marketing of the cloth produced by the weavers in the primary weavers societies.

(Paragraphs 2.9 & 2.10)

It will be against the interests of weavers to interfere Accepted,

7

with the Master Weaver sector till the coopera- tive sector is sufficiently developed and is able to give full service to its members. It would be neces- sary to ensure a minimum wage in this sector so that there is no temptation to pay low wages be- cause of a buyers' market. If master weavers are to be brought into controlled system of input distribution, only such of them as are duly regis- tered in the books of the Director of Handlooms should be accepte d into the system.

(Paragraph 2.11)

;3

Accepted. To start with a few projects may be undertaken on trial basis where the present organisation for handloom sec- tor is very weak. Efforts may be made to keep the overhead charges to the minimum and to make credits available to the weavers covered by the pro- ject at a uniform rate of interest.

There arc large concentrations of looms outside the effective cooperative fold and the Master Weaver fold for which an effective rehabilitation programme will have to be drawn up. During the Fifth Plan period, such a programme should be limited to the scheme for intensive development of handlooms. Units of 5 thousand to 10 thousand looms in a compact geographical area should be taken up un- der this scheme and not more than 25 such units may be taken up during the Fifth Plan period, sui- tably distributed amongst the States having more than 40 thousand looms each. States with larger number of handlooms should be given a larger num- ber of units subject to their capacity to organise and run them.

(Paragraph 2.12)

Technical Development 1

9 At the Central level, the management of the techno- logical institutions and the Weavers' Service Cen- tres should be entrusted to a separate body desig- nated as the All India Handloom Research and De- sign Development Association. The objectives of the Association may be—.

•1 '1) to investigate into (a) the Inability, manufacture and improvement of materials used in the tex- tile and allied industries, (b) utilisation of the pro- ducts of the textile industry ; (c) improvement of various machinery and appliances used by the textile industry and allied trades ; and (d) im- provement of processes of manufacture with a view to securing greater efficiency, utilisation and reduction of costs i

The Development Commissio- ner for Handlooms will be the king-pin in the organisation structure for the development of the handloom industry. All the institutions like Weavers' Service Centres and the Insti- tutes of Handloom Techno- logy will remain under his over all charge and there is no need for the creation of art AH India Handloom Research and Design Development Association to be in ove"r all charge of the above institu- tions. The Institutes/Centres, however, will be allowed ade- quate autonomy in their day to day functioning so that they are able to function effec- tively.

(ii) to undertake directly or assist mttnbWisln the

execution of sample "btfders ;

(iii) to establish, equip and maintain laboratories, work-shops and factt/cies and Carry 6n experi- ments and to provide funds for such work ; and

(iv) to prepare, edit, print, publish, issue, acquire and circulate books, papers, periodical, etc.

(Paragraph 3.2)

IO The Association shall be governed by a Managing Covered by decision against

recommendation No. 9.

Council of 15 members to be nominated by the government consisting of inter-alia, the represen- tatives of the Development Commissioner, Handi- crafts and Handloom Export Corporation of India, All-India Handloom Fabrics Cooperative Marke- ting Society, apex weavers' cooperatives societies, private exporters, State Governments, ex-officie Regional Directors of Weavers Service Centres, etc. with the ex-officio Chief Executive Director as the Member-Secretary.

II The Council will have to be vested with centain auto- Covered by decision against re-

commendation No, 9.

nomy and controlling powers if it has to effectively play the role entrusted to it. It should, inter alia, have sole and full control in regard to all matters relating to the management and organization of the Association, as also powers to take offices or acquire premises for the use of the Association and to ap- point at their discretion, remove or suspend mana- gers, secretaries, Officers, clerks, agents, etc. we- ther engaged on permanent, temporary or special service basis, to determine their powers and duties, fix their Salaries and emoluments and where consi- dered necessary, prescribe security in such ins- tances and to such amount as the Council considers desirable.

(Paragraph 3 •4)

Covered by decision against 1 2.

recommendation No. 9.

The designing, research and servicing activities of the Association shall be under the general direction and supervision of the Chief Executive Technical Director, who will be the ex-officio Member-Sec- retary of the Council. He would be in charge of the Central Coordination Office, assisted by three Regional Technical Directors who shall be appoin- ted by the Council.

(Paragraph 3 4)

13-

Do.

The entire expenditure for the institution and manage- ment of the Association with its Central agency as •well as its regional organisations like Weavers' Service Centres and training institutes such as Indian Institute of Handloom Technology shall be met from the budget grants of the Central Go- vernment earmarked for the handloom and other cottage industries development activity.

(Paragraph 3 +)

[PART I—SEC. 1] THE OAZJETTE OP INDIA EXTRA01UHNA4V 13C9

The field of work of the Institutes of Technology and the Weavers' Service Centres should be cleanly demarcated. The Institutes of Technology shall undertake the following functions:

(a) Basic or fundamental experiments ; (b) Long and short-term training courses to train

experts and artisans; and

(c) Preparation and publication of technical

literature.

(Paragraph 3- 5)

Do.

The activities of the Weavers' Service Centres shall

15

extend to the following areas:—

(a) Routine experiments ; (b) Field Servicing Work ; (c) Assisting members in the execution of sample

orders;

(d) Evolving new designs and supplying the same

to weavers and weavers' org' nisations;

(e) holding of exhibitions and demonstrations;

ara

(f) acting as a puce setter in the highly competitive

and changing export field.

Do.

16

(Paragraph 3 -6) To assist the exporters to trade with more confidence with their samples, manufacture of samples of lengths upto 100 yards in each selected design should be undertaken by the Centres. It is proposed that TO to 1 5 handlooms in each Weavers Service Centre should be reserved to undertake execution of such sample orders. This new activity would help the development of the centres and give a commercial bias to their activities.

(Paragraph 3-7)

D o.

17 The location of the Weavers' Service Centres will have to be suitably oriented to the in tensive develop- ment areas that are being developed in the various States and the export-oriented groupings that are also being developed, so that training and servicing closlcy follow the area development approach. As there is a constraint of availability of suitable personnel, there has to be a priority of location-of W .-avers' Service Centres to support the main development programmes.

Do.

18

(Paragraph 3 • 8) There will be a greater demand for good manage- ment expertise when the Cooperative sector is strengthened and marketing developed as re- commended by the Team. Management studies should be sponsored by the prospective employers either in the cooperative sector, State sector or the private sector.

Do.

19

(Paragraph 3.9) For weavers'training, a suitable follow-up programme including supply of improved appliances should be taken up. This should be a definite programme with a specified target in terms of numbers to be trained during the Fifth Plan period for which funds may be provided in the Central sector. This should be followed up by practical training with selected societies and production organisa- tions so that the trainee is able to stand on his own feet when he leaves the institute.

(Paragraph y 10)

Tn ?'ip;nd piiJ to the trainees should b? suitably enhanced as th- rates of stip;nd b:ing paid at present are too low.

(Paragraph 3-11)

Accepted.

The respansibility for organising and financing the detailed extension services in the intensive deve- lopment areas, so that the new techniques and designs reach the weavers, should be entrusted to the State Governments. The bulk of the service would be really rendered by the extension groups of the State Governments which will be based on the Weavers' Service Centres so that they can dtaw upon the expertise of the Centres and disseminate it in the field of their action.

(Paragraph 3-12)

Scheme for Intensive Development of Handloom

22 The organisational set-up for each intensive develop- ment unit for handlooms Should be in a position to undertake the following services for the weavers:—

Covered by decision against recommendation No. 8. These would be the guidelines for the pro] ccs to be undertaken.

(a) Provision of adequate quantities of yarn ; (b) Modernisation of handlooms where nece-

ssary to make production more efficient;

(c) Organisation of Training ;

(d) Organisation of credit required by the

weavers ;

(c) Arrangements for the marketing of not less than 50% of the production and, if requir- ed by the weavers, 100 % of the produc- tion ;

r

(f) Organisation of exension service for passing

on higher levels of technology in hand- looms to weavers ; and

(g) Maintenance of a Raw Materials |Bank to ensure a continuous supply of yarn, dyes and chemicals (and if necessary organisation of a suitable dyeing unit to support the production programme).

(Paragraph 4-1)

It may be necessary to form such an organisation under Covered by decision against re- commendation No. ". These would be the guidelines for the projects to be undertaken.

the ^Company Law, limited, however, to State administrative and technical personnel and other interests who could help in the development of the weavers. The membership, inter-alia, should comprise a project Director who should be a high level handloom expert trained in management and business, the officer-in- charge of the concerned Weavers' Design-cum-Training Centre, a repre- sentative of the commercial bank which has under- taken to finance the weavers, an officer of the State Government drawn from the department entrusted with the handloom portfolio, a representative of the State marketing orgnisation and three pro- gressive weavers of the project area. A project Executive Board of these members with sufficient freedom of action should be in a position to organise the unit.

(Paragraph 4 "2)

24

Covered by decision against recommendation No. 8. These would be the guidelines for the projects to be under- taken.

The equity capital for this company should be contri- ( bated on a 50:50 basis by the Centre and the States. In case of States backward in handloom development loans for part of their equity capital may be organised from the Centre to tide over any gap.

Do.

25 Since the extension organisation in handlooms should be; a State responsibility, the necessary provision of funds for the employment of extension workers under the project may be found by the State Government from its handloom budget.

(Paragraph 4^4)

Do.

T\~ project can each year take 1000 to 2000 weavers uider its fold aid in a piriod of five years cover 5000 to 10,000 weavers who have got active looms or looms that can be activised. The weavers' Service Centre will be the nerve centre for the design development and the training of the weavers in the area for im- proving their output and enabling them to earn more. Sufficient travelling allowance and facilities Should be given to the staff of the Weavers' Service Centre to liaise with the project authority arid help their extension workers in assessing the requirements of the project and planning the programme of exten- sion.

(Paragraph 4-4)

Do.

A qualified extension worker suitably trained in hand- loom extension should be able to handle 1,000 looms over a period of three years starting with 500 looms.

(Paragraph 4'4)

Do.

Before the project is undertaken, there should be a survey of the hmdloomsin the project area in order to determine the exact problem and the prevailing levels of efficiency. The constitution of the Project Board before whom the project would come up for consideration would ensure that all aspects (Namely, financial, marketing, technical, etc.) are suitably taken care of. The project, after general approval of the Board and the State Government, should be sent to the AU-India Handloom Board for their con- sideration, advice and approval. The Ministry of Commerce, 011 the advice of the All-India Handloom Board, will then pass on the finance which the Cen- tral Government agrees to bear on the project.

(Paragraph 4- 5I

Do.

The project area should be divided into 10 sub-centres, each of which will be the headquarters of an exten- sion worker and the location for the bank represen- tative and the project representative to meet the weavers in the area periodically, to receive their loan applications, make recommendations and, if necessary, arrange for the funds and take back the cloth to pay for the advance so that periodically at the centre the bank is assured of the liquidity of its funds and recovery of its loans. If the pro- ject authority takes this responsibility the commercial banks would be ony too willing to cooperate,1

(Paragraph 4 • 6

Cohered by decision against, recommendation No. 8. These would by the guidelines for the projects to be undertaken^ 1 The project will have to organise the purchase of suitable yarn according to the requirements and Or- ganise its distribution so that the weavers gets it preferably at ptices less than what the merchant in the local market would have offered him. The pro- ject Should also engage a suitable marketing exp.rt who can plan local marketing for some of the pro- duciionand centralised marketing through the cen- tralised organisation in the urban centres for the rest of the produc iun. Havii.g decided upon the type of pr >dac ion which should be within the ca- pacity of the weavers, the work Should be so dis- tributed amongst the members that they have sub- Stantiilwork and arc abli to c aq dfc nt wages.

Do.

The ultimate objective of the project should be to enable the weavers under the project to transform themselves into a cooperative organisation. The process can start with organising the weavers under each branch unit of the project into a cooperative and then passing the work of the area to the Society, with the project continuing its service to the cooperatives.

(Paragraph 4-9)

Inputs for the Handloom Industry

Accepted.

32 The supply of yarn to the cooperative sector can be ensured best by promoting cooperative spinning mills. In respect of the handlooms outside the co- operative fold, the NTC mills could be linked up with the handloom sector.

(Paragraph 5 4)

33

Accepted in so far as the obliga- tions to be imposed pertem to the new mills to be established.

It has also to be ensured that the yarn manufactured by a cooperative mill in a mainly handloom area is supplied in full to the handlooms. In addition, the yarn availability of the NTC should be reasonably linked with the handloom requirements outside the cooperative sector.

(Paragraph 5^4)

34

The Textile Commissioner should ensure that straight hank will be utilised by the handlooms and the objective should be to see that 300 million kg. straight hank yarn isproduced every year for the handloom sector. The Textile Commissioner should also ensure a minimum 62- 5% produc- tion in straight hank form. There should also be a suitable provision in these orders to enable co- operative spinning mills and State sector spinning mills to provide t ven a higher proportion of yarn in straight hank form in order to suit local requiie- ments.

Accepted. Straight hank yarn is by and large being used by the handlooms only. Though every effort is being made by the Textile Commissioner to see that straight hank yarn is used by handloom only, it is not possible for him to ensure that such yarn will be used only by handlooms. Steps have already been taken to jack up production of hank yam to meet the handloom, sector. Violations of the Textile Commissioner's Orders in this regard will be dealt with under the existing orders/regula- tions.

(Paragraph 5.5)

—1

Ipkt I—Sfefc. 1] ttlfe GftitfrflB Of TfNtrtA tOCfRA&RtolMARY 1373;

I

3 —

The Textile Commissioner must strengthen his organisation and ensure that the rrfills>certy out his orders (regarding production of yarn in stn&Ht hank form) in full. If any statutoty support for punitive action by him against the mills is lacking the Government must provide the same immediately.

(Paragraph 5-5)

36

Accepted in principle and for actual implementation, availa- bility of adequate resources will have to be ensured.

It is necessary to disuse that between expansion of the more efficient cooperative mills to 50,000 spindles capacity and installation of new spinning mills, the one million extra spindles (reserved by the Ministry of Commerce over and above the automatic licensing capacity of 25,000 if cooperative spinning mills come forward) are availed of during the Fifth Plan period and if possible brought into effective operation during the Plan, period.

(Paragraph 5'5)

The total capital requirement for setting up spinning

37

Accepted. Subject to enough resources forth- coming to the NCDC. The Industrial PinaijCt Coipoia- tion will not be able to pro- vide assistance to the extent proposed.

mills In the cooperative sector would be of the orders of Rs. 175 crores. Members will have to find about Rs. 2Z- 5 crores and the State Govern- ment/NCDC about Rs. 45 crores. Loan capital c f more than Rs. 100 crores will have to be found from long-term lending institutions. The NCDC will have to find extra Rs. 18 crorcs to help the State Governments to find their share of the equity to supplement the Fifth Plan provision of Rs. 22 crorcs in the State sector for share capital and Rs. 5 crores already provided by the NCDC for this purpose.

(Paragraph $• 5)

Accepted.

38 In, the States of U.P., Bihar, Orissa and Assam which are backward in cooperative efficiency, spinning mills are particularly required and therefore the share capital in these areas has to come substantially from the State sector.

(Paragraph) 5.5)

39

Accepted. This involves amend- ment of the R.B.I. Act and is already engaging their attention.

The Reserve Bank should give facilities for medium- term financing to the Weavers in order to enble them to contribute to the share capital of these cooperatives. (Such facilities arc available to sugar- cane and cotton growers).

(Paragrapg 5-5)

Special steps will have to be taken to get funds I.F.C. so that they can invest funds to the tune of more than Rs. T 00 crores in the spinning mill sector to enable the recommended priority programme to put through.

(Paragraph 5.5)

Accepted in principle. But im- plementation will be subject to the availablity of adequate resources. The main objective is to produce enough yarn 11 hank form for full use of the handloom Sector whether by mills in the private or Govt, or cooperative sector. Pre- ference will be given to the cooperative sector to the extent feasible. Mills in Govern- ment and private sectors will come next in order of priority.

41 Special steps should be taken to ensure that the m ic'ii lery required for the cooperative and the State spinning mills is provided on apriority basis withi'i a reasonable time frame and on a reasona- ble price formula.

The Textile Commissioner wili use his good offices and re- gulatory powers to meet the requirement of the coopera- tive spinning mills for machi- nery, etc.

(Paragraph 5.5)

42 Where there is a serious shortage of yarn and an ac- tive black-marketing in yarn, it will be necessary to organise a suitable distribution channel in the State to ensure that the handloom weaver gets his yarn at a reasonable price (inclusive of transport cost) at a retail market. The devising of a system of controlling raw cotton and yarn prices should receive serious consideration and in the mean- while a suitable supervised distribution organisation set up in the States.

(Paragraph 5, 6 & 5, 7)

The Reserve Bank should ensure that credit on th: Accepted and commended to hypjthctication of free yarn by the mills and mtd- the Reserve Bank of India, dleman is SJitably checked and long periods of hold-up prevented.

(Paragraph J.8)

Noted.

44 Any organised distribution system shculd aim at providing 50% of the requirements of the primary cooperatives in a prc-requested package of counts and quantities every month. It should be possible for the primary cooperatives to look after them- selves reasonably well by going to the market for the balance and any variations they may require during the month.

(Paragraph 5,9)

Noted.

-45 The Government may work out an arrangement un- der which the manufacturers make available the required quantities of dyes and chemicals to a few specified institutions etc. in each State for final distrib ition to the handloom weavers. The State Governments should work 0 it the consumption data on the basis of pastlifting and the producers can make available these quantities directly for distri- bution to the handloom weavers.

(Paragraph 5.10)

Accepted.

46 The Institute of Handloom Technology should run courses for training managers. There should be a System of further training in production organisa- tions which may be s 'lected from practical coope- rative societies and/or organisations in the non-co- operative sector. The candidates for these courses should invariably be sponsored by cooperative irs- titutions and private enterpreneurs who could give a suitable undertaking and guarantee that these trainees will be employed by them in the handloom sectors. As far as possible the candidates should be selected within the fold of weavers.

(Paragraph 5.12)

Accepted. The All India Hand, 47

loom.

The stipend for such trainees should be suitably in- . creased, if necessary, by imposing some financial obligation on the sponsoring organisations so that suitable candidates are forthcoming for this train- ing.

(Paragraph 5-12).

48

Accepted.

The existing scheme for modernising the handlooms m the States for better efficiency should be taken up as a Centrally-sponsored scheme on 50:50 basis.

(Paragraph 5-13).

Accepted.

49 Processing facilities must be linkd up with the marketing organisations that are being developed either through apex cooperatives or Trading Cor- porations set up by the States so that there is an effective link between production, processing and marketing. These,processing facilities may also be developed in the Centrally sponsored sector on a 50:50 basis.

(Paragraph 5-14)

Accepted.

50 P re-loom processing facilities such as dyeing and sizing should be provided sufficient magnitude to support the improved looms. This should be don e through Primary Cooperative Societies as a Centrally sponsored sector scheme on a 50:50 basis.

Finan

ict anii Credit facilities

Accepted.

5i In cases where the Central Bank is weak and unable to obtain finance from the Apex Banks/Reserve Bank and the Societies arc consequently not able to take benefit of this course of finance, the effective re- medy may be to arrange direct financing of the Primary Weavers Societies from the Apex Bank.

(Paragraph 6-4)

Accepted.

There is no constraint on the availability of funds from Reserve Bank for the cooperative sector. The problem is rather of the Societies being unable to come up to the norms set by the Reserve Bank of India even though these norms are not excessively strict or onerous. However, it is in the best interest of the Cooperative Societies to observe the financial discipline laid down by the Reserve Bank and to improve their own operating efficiency within the framework of the RBI "cheme. The State Governments have, however, to ensure thtt the Apex Cooperative banks and the Central Banks are fully aware of the provisions of the RBI schemes so that they can assist societies to draw maximum advantage from this scheme.

(Paragraph 6-5)

53

Accepted and recommend' to the Reserve Bank of India.

The limits laid down under the RBI scheme may be revised upwards in view of the rising costs of pro- duction and living as follows :

Cotton handloom weaver! Rs. 1,000 Woollen handloom weavers Rs. 2,000 Silk handloom weavers. Rs. 2,000 (Paragraph 6*6).

Accepted.

54 It does not seem necessary to further liberalise the present system wafer which (1M Rewrvo Bonk, besides on overall zj per cent limit, allows an ad- ditional special limit on holding of stocks. Main- taining a relationship betwtan productivity rod actual production on the one hand and between production and credit and holding of stocks on the other is very essential.

-55

The p,l#e"ential Interest Rate S cneme is applicable only to in- dividuals coming under the prescribed income groups. It iB not applicable in the caso of institution! and/or organisa- tion of individuals. The DIR raj^ cannot also be equated to t£# rate charged by the co- operatives.

(Paragraph 6-7) The proposed intensive develppment programme C"n be organise i in the 165 districts in the country which arc covered by the DIR scheme of the nationalised banks. It should be possible to persuade these banks to finance the"e Weavers under the DIR. The interest rate, under the DIR, may be moro favourable than the rate of ij per cent below, bank rate now given to the Reaver > Iffthfl coopera- tive fold. There may not; be any objection if the DIR rate is equated with th,e raje changed¹ tay the cooperatives, if that facilitates taking up 4 larger programme.

(Paragraph 6-9)

-36

Accepted.

The programme of development suggested by the Team will still leave a certain percentage of the handloom weavers without active support eyen at the end of the Fifth Plan period. It Is, however, mire important to see that these, proposals are effectively implemented. A larger programme or; the basis of misguided sympathy may make the entire scheme ineffective.

(Paragraph 6-10)

Covered hy decision on recom- •57

mendation No, 6(b).

If the Cooperatives are to be engomaged, any finance ing of a system (like handtoom finance and market- ing corporations set up by the State Governments) which keeps people away from a, cooperative, is el>t. The deterirnental to cooperative developinl RBI should fully follow the policy of making the credit to the coop:raives htndlooms effective and for this purpose shoujd bring ip various methods which have been inducted In the field of agri- cultural credit-particularly provision pf share capital to the cooperatives through the State Governments. Till the RBI Steps in, the NCDC Should provide this facility.

(Paragraph 6-11)

Covered by decision on recom- '58

mendation No. 55.

The supply of yarn and arranging the marketing of produce in the area covered under the intensive programme should be the main lines of activity of the Handloom Finance and Trading Corpora- tions. With the strengthening of the cooperative System, the bringing in of the Intensive Develop- ment Programme and the spread of DIR scheme there would be no case for any finance from the State Plan resources through the Hwdloom Fin- ance and Trading Corporations for the handloom Sector. The trading operations can be done subs- tfnti^y an the ways and means credit which can be obtained from scheduled banks outside the Plan frame. The banking institutions will be glad to extend credit to these Corporations and even give them DIR credit.

(Paragraph 6 - u)

Accepted.

59 1 Problems regarding; financing ond credit have arisen mainly because of lack of ptopcr supervision of credit, marketing arrangements and difficulties in the making recoveries. Financial discipline has to be enforced ard, therefore, supervision of credit by extension staff and efficient marketing arc of prime importance.

(Paragraph 6-13)

Problems of Marketing

Accepted.

6o T ic \o-x Marketing Societies have to get morein- valvid in marketing functions since the p"3t ex- perience is that the primary weavers' society cannot run their own marketing organisations.

(Paragraph T 3)

•61

Accepted,

Tat Apex Societies must take responsibility for supply of yarn for a reasonable percentage of weavers' requirements and arrange to market at least 50% of the production of the primary weavers society through a central organisation. T ie primary societies can be expected to deal with the balance 50% of production by local mar- k;ting. The Apex Marketing Societies should iimr-dlately strengthen their organisations and take over this responsibility in a phased manner in each State.

(Paragraph 7-4)

<"2 T i'. State ow lei C irpirati ms/E rnjria should deal w th thi mirke'ing of the produce of individual weavers and as far as possible by pass the master weavers W'IO s'lVild be able to mirket their own gjods themselves.

The State-owned Corporations/ Emporia Should additionally deal with marketing of the produce of handloom co- operatives.

(Paragraph 7-5)

arktting Subsidies

"63

Accepted-

Ail s i) lid t>; ni/:n in the form of subsidy to Apex 1 Societies and State Corporations, for puting their S'IOW roams. A managerial subsidy Should alSJ b: given for three years on a tapering basis. T lis expenditure iruy be shared by the Centre and V\i States oi a 50:50 basis.

(Paragraph 7 6)

Accepted.

*4

The All-India Handloom Fabrics Marketing Coopcrax tive Society should bo suitably strengthened and made an effective marketing organisation. Grant for sotting up new handloom homes and also for c decoration, renovation and air-conditioning of existini handloom houses on reasonable basis should be allowed to this organisation from the Central sector.

(Paragraph 7-7)

If a 'rebate' system is accepted by the State Govern- Accepted.

*5

mants, they should make it a point to reimburse promptly the legitimate rebate to the Societies.

(Paragraph 7- 8)

66

Accepted.

If the various recommendations made for putting the 1 handlooms in a competitive position vis-a-vis thepo- werlooms and the mill sector are accepted, the hand- loom goods could get their fair share in the market and no subsidy would be necessary. However, a change-over from a system of subsidy to one of no no subsidy should be effected gradually over the next three years by taperinq of tho subsidy. With a reduction of the expenditure on subsidy, the State Government can use the available funds for (i) share capital loan to weavers, (ii) managerial Subsidy, (ii) training expenses, and (iv) contributory provident fund.

(Paragraph 7-9 to 7-11)

67 If any State decides to continue the subsidy it will This is for the considertion

the State Governments not be advisable on the part of other States to dis- continue it and thereby put their cooperatives at a disadvantage with respect to the cooperatives in the State which continues the subsidy.

(Paragraph y 9)

Export Promotion

Accepted.

68 Suitabl; eiuip.n:nt has to bs de/elop>d and supplied to t h; hn jlo3iM cit-ring tJ th= export sector to on- sure that the following main defects noticed in hand- loom products exported are effectively removed.

(i) Absence of required threads per inch prescribed In

tho purchase orderj

(ii) Colour bars due to uneven to picking, (iii) Colour variations arising from uneven dyeing j (iv) Lack of uniformity in width of fabrics.

(Paragraph 8-2 to 8-7)

Accepted,

69 Special additional loom attachments necessary for producing piece lenghts of 4 metres and above should be made available.

(Paragraph 8- 8)

A ccepted.

70 A common Facility Service Centre equipped with improved machinery may be providod for an area covering 500 to 600 looms engaged in export orders, for the provision of facilities for preloom processing and post weaving finishing stages. It would be thus possible to render the preparatory processes in the production of bulk export varieties uniform, reduce production costs and increase work output. Such Service Centre will also make for better supervision and effective control.

(Paragraph 8*9)

Accepted.

7i

The Institutes of Technology should take up no imme- diate basis research work on post loom weaving pro- cess including preshrinking and finishing by pressing and suitable drying.

(Paragraph 8' ic)

72

Accepted.

Tha Weavers' Service Centres must bo equipped to make samples and sample lengths that are required by tho foreign buyers and for which the exporters can place orders within the time specified. If the rough amount of business that is expected in a year at var- ious Centres can be worked out by Export Promo- tion Council and indicated to the Central Council of the Design and Service Centres, it may not be diffi- cult to organise this service on cost basis.

(Paragraph 8 - n)

Accepted.

73 In the cas; of silk handloom cloth, facilities have to be developed for prc-shrinkage and making the fibre crease resistant.

(Paragraph 8.12 )

Accepted.

74 The promotional effort specially in the field of ad- vertisement haa to be specific in regard to the actual sources from where the products advertised will be available. It may be cheaper for the haudloom exporters to have joint advertisements with their buyers abroad for their material along with the other materials with the buyers, who are generally chain store organisers. The big export houses including the HHEC and the Fabrics Society should also be enabled to go into the specific advertisement business in the important markets.

(Paragraph 8.13)

The All-India Handloom Board would be the best

75

Not accepted. The cash assis- tance will be disbursed by tho usual prescribed channels.

advisory body in the matter of cash incentives ne- cessary for furthering handloom exports. Not more than a third of the handloom funds should, in each yearj be earmarked for this purpose and if any additional funds are required because of the export situation and the need to earn more for- eign exchange, such finances should come from the consolidated fund.

(Paragraph 8.14)

Accepted.

76 The problem of getting a large number of experienced , cutters, designers and production managers should be examined quickly by the All-India Handloom Board and a suitable training scheme formulated for immediate implementation under which nominated trainees could be sent for training abroad to learn the latest techniques, in the field of handloom garments.

(Paragraph 8.15)

77

Accepted. Assistance of Trade Development Authority may be availed of as far as possible.

A suitable scheme should also be formulated under . which senior designers of the Weavers' Centre are sent abroad to understand the coming trends in fab- rics so that the necessary adjustments and annual changes could be made in our production pro- grammes to fit them in with the requirements from foreign countries.

(Paragraph 8.16)

Accepted, subject to the technical feasibility of the scheme being Satisfied and availability of enough bulk orders for export.

It is necessary to deveop under an Export Oriented Pilot Production Scheme 50 production units in important handloom centres i n the country which are now contributing to the export market and which have highly qualified handloom weavers. Each cen- tre shoi Id develop within a period of 3 to 4 years, 1,000 handlooms which can work according to spe- cific orders in the export market. Such units will have to be sponsored by export houses. The HHEG and the Fabrics Society may also sponsor some units in order to maintain their supremacy in the handloom export market and State Handloom Marketing Organisation can also take up such units. For every handloom under the project Investment for modernising the equipment should come from the Centre. Pre-loom processing and post weaving and finishing facilities would have also to be provided so that the produce is of top quality. Each unit will have to organise exten- sion service for training of the weavers in the new equipment and ensuring the quality of production. Since these units are sponsored by export-oriented organisations, it is presumed that the arrangements for the supply of yarn, credit and marketing of production will present no problems.

(Paragraph 8.17)

Accepted.

79

Design, colour and fabric quality changes are con- tinuously taking place in the consuming markets of the world and continuous research support will be necesary for export promotion. It is important that field scale trails are held of the laboratory find- ings particularly in certain areas like preparatory processing, weaving, processing and diversification of production. A suitable programme for this pur- pose Should be prepared by the All-India Handloom Board. It should be possible to try out labora- tory results on field scale in about, suitably scat- tered, 503 looms, It would be easy to locate these looms in the Export units.

(Paragraph 8.1")

(.

Reservation for handloom Sector and the Pjivsrloom Gotnpetitior 80 Eight items which are now reserved both for handlooms and powerloom units with fnurlooms or less Shall be reserved exclusively for the handloom sector,

(Paragraph 9 • 2)

It is not considered feasible to reserve exclusively for the handloom sector all the eight items as proposed, as this will not leave enough field of production for the powerloom Sector. How- ever, the following five items , which are presently reserved for production by handlooms and powerlooms units having not more than, four powcrlo oms and which are by and 1 arge produced by handlooms only, will be reserved exclusively for pro- duction in the handloom sector ;

(i) Yarn dyed dhotles ; (ii) low reed pink cloth ; (iii) all coloured sarees ; (iv) dusters; and

(v) towels in honey-comb

weave or Erazha Thotu.

The differential between units of 1 -4 powerlooms and units with more than four power- looms will also be dispensed with in so far as reservastion of lines of production is concerned. All powerlooms units irrespective of their size andloomage can produce any type of cloth except those exclusively reserved for the handloom sector.

Si

Accepted.

The handloorn industry needs special protection as it could be one of the important programmes for rais- ing trie lowest three deciles of the population to the minimum consumption level. Besides in our Strategy for rural employment, we need viable i ndus- tries in the decentralised sector which can provide a living wage and the handloom is eminently suited from this point of view.

(Paragraphs 9-5 & 9" 7)

82 The advantages that the powerlooms have over the handlooms with their better technology and almost the same level of excise vis-a-vis the handloom sector has to be set right so that the powerlooms are no longer in a position to under-bid the hand- looms in their legitimate markets. The excise differential between the powerlooms and the hand- loom's should be of the same order as between the composite mill and the handloom sectors.

(Paragraph 9-8)

The gap in incidence of excise duties on mill made cloth and powerloom cloth has widened over a period of years in favour of the latter. This gap needs to be re- duced but for various reasons the excise levy on powerloom sector cannot be fully at par with that on the mill sector. The observa- tions No. 84 to 89 will be kept in view while taking decisions in this regard.

Accepted.

33

T n; t-x mirk system should bi reintroduccd and Strictly enforced with the legitimate objective of taxing the powerloom cloth. Till such a system is introducedj the excise may be levied on the yarn utilised by the powerlooms, as suggested by the Ashoka M^hta (Powerloom Enquiry) Committee-1964.

(Paragraph 9 "9)

Covered by decision against 84

recommendtion No. 82.

Steps should b; immediately taken to impose a handloom cess on pjwsrlooms to close the gap in the incidence of excise on pawjrlooms vis-a-vis the mill sector, in respect of all qualities of cloth produced. The income derived from this cess should be used specifically for the development of handlooms.

(Paragrahs 9-10 & 9"U)

Till an equitable tax structure i s evolved the excise Noted for consideration and to be levied on powerlooms shall be based on a com- subject to decisions on re- pounded levy, a duty on yarn and a processing duty. commendations 82 & 91.

(Paragraph 9-12)

36

Noted for gorsideratlon and subject to decisions on re- commertiation 82 & 91.

The compounded levy may be fixed at Rs. 300 per : powerloom irrespective of the number of looms in a unit. The extra compounded levy Shall be im- posed in favour of the handlooms. The entire levy may be treated as a handloom cess and the amount that is at present realised as compounded levy may be deducted and made payable to the contingency fund and the balance credited to the Handloom Fund.

87

Do.

(Paragraphs 9.13 &9.14) The excise duty on free yarn, other than hanks, may be jacked up to the extent necessary for bringing the yarn duty on powerloomS to a reasonable level vis-a-vis the mills. The additional duty may be collected in the form of a handloom cess on yarn for the benefit of handloom development.^ As the composite mills sector uses its own yam it should be possible, in the excise frame, to leave it out of the purview of this cess.

(Paragraph 9.15)

33

Do.

The cess may tempt the powerloom interest to put in a mechanised contrivances to real hank yarn suitably for powerloom use. Such reeling should be prohibited with punitive measures. Part of the cess levied should be utilised to build up a Strong excise organisation to ensure that such misuse of yarn does not take place.

Do.

89

(Paragraph 9.16) Tho processing duty in case of powerloonos should bo jacked up by at least 20 per cent so that some part of the differential in the overall incidence of taxation between the mill and powerloom sectors is covered. This extra levy Shall be in the form of a handloom surcharge creditable to the Handloom Fund.

(Paragraph 9.17)

Noted.

90 Since viable rural industries have an important place in our Plan Strategy, it is necessary to irduct more and more people in the rural sector into the hand- loom industry. This Team has identified areas where additional investments are necessary during the Fifth Plan to give a boost to the handloom in - dustry. Unless these investments arc ensured and the recommended Infrastructure brought in quickly, there will be a serious deterioration in the unemployment and underemployment posi- tion in the handloom sector.

(Paragraphs 9.18 & 9-19)

91

It is expected that the recommended handloom cess, compounded levy and the processing duty will be- nefit the handloom fund to the extent of about Rs. 2o crores per annum. This fund should be utilised for various schemes recommended by the Team for the improvement of handlooms during the Fifth Plan period and thereafter.

Having regard to the practice difficulties in levying and collec- tion of cess on powerloom sec- tor and creation and operation of a separate fund, adequate funds should be made avail- ble on a firm and continuing basis for undertaking th" scheme suggested oy the Study Team.

(Paragraph 9.20)

MANI NARAYAKSWAMI. Joint Secy*

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„ IPAHT I—SEC. 1] THE GAZETTE OF INDIA EXTKAOBDINARIf 1397

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