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INTRODUCTION
Handloom Weaving is a labour intensive occupation spread throughout the country, mostly in villages. The Handloom sector employs over 65 lakh persons in weaving and allied activities (as per Joint Census of Handlooms and Powerlooms 1995-96). The main raw material used by this sector is yarn, which is being produced by spinning mills. The yarn trade was controlled by the traders and most of the handloom weavers were dependent on the traders for their yarn requirement. This had resulted in unchecked escalation in yarn prices and shortage in its availability.
Government of India had felt the need for the formation of a National Level Apex Body to overcome those problems by effective intervention in the yarn market and therefore, set up the National Handloom Development Corporation (NHDC) Ltd., a Government of India Undertaking in 1983. The main objective of NHDC is to make available to weavers throughout the country, yarn of the appropriate and required quality, through a well-ordered system. The yarn manufactured in a particular place is based on the quality of cotton available in and around that place, while the yarn consumed by the weavers in a particular area is based on the consumption pattern prevailing in that area. Therefore, in most of the cases, weavers have to depend on the yarn produced in other areas. The transportation of yarn from one place to another, increases the cost of yarn considerably putting the weavers at a disadvantageous position. Keeping the above in view, Government of India introduced a scheme for Supply of yarn at the price in which it is available at the Mill Gate in 1992. Under the scheme the transportation expenses involved in supply of yarn are reimbursed by the Government of India. The nodal agency for the implementation of this scheme is NHDC.
Government
of India has also been providing equity to the NHDC for strengthening its
activities. Since strengthening of NHDC by enhancing its capital
base is an integral part of its main activity i.e. implementation of the
Mill Gate Price Scheme, it has been considered appropriate to merge the
component of Investment in NHDC with the Mill Gate Price Scheme.
Thus, this scheme titled Mill Gate Price Scheme has two components, namely,
(i) Supply of yarn at Mill Gate Price and (ii) Investment in NHDC.
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