The National Handloom Development Corporation (NHDC) Limited was set up in February, 1983 as a Public Sector Undertaking by the Government of India as an autonomous body under the Companies Act, 1956 in pursuance of the imperative need for a National Level Agency to assist the speedy development of the Handloom sector by coordinating all actions covering the procurement and supply of inputs at reasonable prices, augmenting the marketing efforts of State handloom agencies and initiating developmental activities for upgrading the technology in the handloom sector and improving productivity. NHDC functions under the administrative control of the Office of the Development Commissioner (Handlooms).  To strengthen the equity base of NHDC, Government of India has been providing equity @ Rs.1.00 crore every year.

NHDC has been supplying yarn, dyes and chemicals through State Handloom gencies, Apex bodies, Regional Unions, Weavers’ cooperatives, Handloom Development Centres, Handloom Associations and also Handloom manufacturing units engaged in export promotion. It has been procuring yarn of all varieties, such as, cotton, polyester, viscose, blends, woolen, silk, jute, etc., from more than 522 reputed spinning mills and delivering the same to more than 1271 agencies.

The activities of the NHDC are intended to achieve the following:

· To ensure the availability of raw materials like yarn, dyes and chemicals and other inputs to handloom weavers.

· To contribute to the growth of infrastructure and appropriate technology.

· To create marketing opportunities for higher output and to add to marketing opportunities for exports.

· To act as a channel for routing Central Government funds, loans and grants to Handloom Corporations, Co-operative Societies and other bodies or persons engaged in the production and development of handloom sector.


The objective of this component is to provide additional equity to NHDC to enable it to enhance its equity base for availing of the enhanced credit required for its activities including enhancing the volume of yarn supply to the handloom weavers / handloom organizations.


During the XI Plan, Government of India will provide support to NHDC in the form of equity to enhance the equity base of the Corporation to enable it to avail more credit for meeting its financial requirements, subject to the following conditions:

1. A proposal in this regard will have to be approved by the Board of Director of NHDC.

2. The maximum equity allocation will be of Rs.1.00 crore every year.

3. NHDC will have to submit the audited balance sheet for the previous year duly approved by the Board of Directors along with their proposal.

4. The NHDC will utilize the money to allot one lakh equity share of Rs.100/-each (fully paid up) to the President of India.  A certificate in this regard will have to be enclosed in the proposal.
5. NHDC will fulfill all the conditions/instructions issued by Government of India (Ministry of Finance, Ministry of Heavy Industry and Public Enterprises, Department of Public Enterprises, etc.) from time to time on the subject for payment of dividend to the Government of India.

6. NHDC will ensure the achievement of target/work obligations with reference to the Memorandum of Understanding (MOU) signed between Ministry of Textiles and NHDC.