How To Leverage Government Grants And Subsidies For Handloom Enterprises In India

They often reflect the history, traditions, and stories of a particular region or ethnic group. It often plays a role in customs, rituals, and ceremonies, becoming a symbol of identity and a connection to cultural roots. Many handloom products are crafted using techniques that have been practiced for centuries. Supporting handloom enterprises helps maintain these artisanal traditions that are integral to cultural heritage.

So, the Handloom and the Artisan together connect all the dots to sustain a beautiful life that contains all the aspects of life i.e., a sustainable future, a healthy environment, and a combination of different cultural aspects. Handloom craftsmen face a myriad of challenges in today’s rapidly evolving market and socio-economic landscape. Government support can play a crucial role in addressing these challenges and strengthening the handloom industry.

The potential impact of government support for handloom entrepreneurs is substantial. By addressing the fundamental challenges through financial assistance, skill development, marketing support, technological upgrades, and policy interventions, governments can not only safeguard this traditional art form but also turn it into a sustainable and competitive sector that contributes significantly to the economy and cultural preservation. To foster development in this sector, the government has introduced several forms of financial aid in the form of grants and subsidies. By effectively leveraging these, handloom enterprises can innovate, expand, and strengthen their businesses sustainably. 

Let’s discuss more about these Handloom Enterprises and Government subsidies along with the leverage of Government grants. 

Understanding Handloom Enterprises

Handloom enterprises refer to the traditional art of weaving textiles by hand, using a loom. This age-old practice involves the interlacing of two distinct sets of yarn – the warp (length) and the weft (width) – to create a fabric. Unlike mechanized weaving processes, handloom weaving is labor-intensive and requires skilled craftsmanship. These enterprises range from individual artisans and family-run units to small-scale workshops, each contributing to the creation of unique, culturally rich fabrics.

Role in the Textile Industry

Handloom enterprises cater to a specific segment of the textile market that values craftsmanship, heritage, and sustainability. They contribute to the diversity of the textile industry by offering a wide range of products, each with unique regional characteristics. This diversity fosters innovation in design and technique. As labor-intensive units, handloom enterprises are significant employment generators, often in rural and semi-urban areas. They play a vital role in providing livelihoods and sustaining local economies.

Cultural & Economic Importance

Common Challenges Faced by Handloom Enterprises

• Many handloom enterprises operate with traditional equipment, limiting their efficiency and production capacity. The absence of modern technology hinders competitiveness in terms of speed, quality, and innovation.

• Limited access to broader markets, especially for small-scale weavers, poses a significant challenge. Geographic isolation, lack of exposure, and difficulties in reaching urban consumers hinder market expansion.

• Handloom entrepreneurs often face challenges in securing adequate capital for investment in technology upgrades, raw materials, and day-to-day operations. Limited financial resources can impede growth and sustainability.

• Rapid changes in consumer preferences and market trends necessitate continuous skill development. Many handloom weavers lack access to training programs that could enhance their design and production capabilities.

Emphasizing the Need for Government Support

• Establish funds, grants, and subsidies specifically tailored for handloom enterprises. Financial support can help in acquiring modern equipment, improving infrastructure, and addressing working capital needs.

• Launch initiatives to provide handloom weavers with access to modern technology. Subsidies or grants for the adoption of advanced machinery can enhance productivity and competitiveness.

• Implement programs that facilitate market access, both domestically and internationally. This could involve organizing trade fairs, creating online platforms, and supporting marketing campaigns to promote handloom products.

• Establish training programs to upgrade the skills of handloom artisans. Workshops, skill development centers, and collaborations with design institutes can help weavers adapt to changing market demands.

• Offer financial literacy programs to handloom entrepreneurs. This will empower them to manage finances effectively, understand the importance of budgeting, and navigate financial institutions for loans and grants.

• Allocate resources for research and development in the handloom sector. This can lead to innovations in design, techniques, and sustainable practices, keeping the industry dynamic and responsive to market trends.

• Create handloom clusters with shared infrastructure facilities. This can promote collaboration, reduce production costs, and create a supportive ecosystem for handloom enterprises.

• Conduct awareness campaigns to educate consumers about the cultural and environmental significance of handloom products. This can create a demand for these products, further supporting the market.

Government Grants and Subsidies:

Government grants and subsidies are non-repayable funds provided by the government to support eligible businesses. Grants are often provided for specific projects, while subsidies usually lower the cost of goods, services, or specific business areas, thereby enabling competitiveness and growth.

Identifying the Right Grant or Subsidy:

Union Government Schemes: A variety of grant schemes are offered at the central government level, like the Handloom Weavers' Comprehensive Welfare Scheme, and Block Level Clusters under the National Handloom Development Programme, among others. Start by identifying which ones apply to your enterprise.

State Government Schemes: State governments also offer schemes specifically designed for their regional handloom enterprises. Make sure to comprehensively research all options available in your state.

ONGOING SCHEMES AND PROGRAMMES

1. Handloom Weavers’ Comprehensive Welfare Scheme (HWCWS) - It offers insurance coverage, including life, accident, and disability insurance, to handloom workers under programs like the Pradhan Mantri Jivan Jyoti Bima Yojana(PMJJBY), Pradhan Mantri Suraksha Bima Yojana(PMSBY) and Converged Mahatma Gandhi Bunkar Bima Yojana(MGBBY).

2. National Handloom Development Programme (NHDP) - 

Training of handloom weavers and their children: The Ministry of Textiles has signed a MoU with Indira Gandhi National Open University (IGNOU) and the National Institute of Open School Education (NIOS) to ensure educational facilities for weavers and their families. NIOS provides secondary and advanced level education to handloom weavers, including specialized subjects such as design, marketing, and business development, in a distance learning format. Meanwhile, IGNOU provides continuing education programs through accessible and flexible learning opportunities that are relevant to the future aspirations of handloom weavers and their children.

 The Ministry of Textiles will refund her 75% of the admission fee to her NIOS/IGNOU courses for women learners belonging to SC, ST, BPL, and handloom weaver families.

 Weaver MUDRA Scheme: The Weaver MUDRA Scheme provides loans to handloom weavers at a preferential rate of 6%. Margin support of up to Rs 10,000 per weaver and a loan guarantee for three years will also be provided. The MUDRA portal has been developed in collaboration with Punjab National Bank to reduce delays in the disbursement of funds for margin and interest subsidy.

Block Level Cluster was introduced in 2015-2016 as one of the components of the National Handloom Development Program (NHDP). Up to Rs 2,000 crore per BLC for various interventions like skill upgradation, Haskarga Samvardhan Sahayata, product development, construction of work sheds, project management costs, design development, and setting up of common facility centers (CFCs). Additionally, financial assistance of up to Rs 50 million will be available for setting up dyeing units at the district level.

 Hathkargha Samvardhan Sahayata (HSS): Hathkargha Samvardhan Sahayata (HSS) provides looms/accessories to weavers to increase income through improvement in productivity and quality of handloom products. It was established on December 1, 2016. Under this scheme, 90% of the cost of the loom and accessories will be borne by the Government of India and the remaining 10% will be borne by the beneficiaries. The Government of India's share will be transferred directly to the bank accounts of the beneficiaries through designated institutions.

 Handloom Marketing Support is one of the components of the National Handloom Development Programme.

 Financial assistance will be provided to states/eligible handloom factories for organizing marketing events in national and international markets to provide them with a marketing platform to sell their products directly to consumers.

 India Handloom Brand: On the occasion of  National Handloom Day on August 7, 2015, the 'India Handloom' brand was launched by the Prime Minister to identify quality handloom products. We promote the production of niche handloom products with high quality, authentic traditional designs, free of defects, and with no impact on the environment. Since its launch, there have been 1,232 registrations across 122 product categories, with reported sales of Rs 689.72 crore as of March 31, 2019. Various major brands are making efforts to launch their own branded handloom clothing.

 E-commerce: To facilitate e-marketing of handloom products, a policy framework has been designed where any e-commerce platform with a good track record can participate in the online marketing of handloom products. Accordingly, 23 e-commerce companies have been appointed to sell handloom products online. As of March 31, 2019, total sales were reported at Rs 3,472 crore through the online portal.

Urban Hearts will be established in major towns and cities to provide artisans and weavers with good direct marketing opportunities and eliminate middlemen. So far, 38 such city harts have been sanctioned across the country.

The Sant Kabir Award is given to outstanding handloom weavers who have inherited the tradition and made a valuable contribution to its development.

The National Award is given to handloom weavers in recognition of their outstanding contribution to the development of craftsmanship and handloom weaving. This awareness allows them to continue working more enthusiastically and productively. From 2012 to 2016, the national award was given to 102 handloom artisans across the country. From 2016, apart from the existing Sant Kabir Awards, National Awards, and National Achievement Certificates, only women handloom weavers in the field of textiles will receive two Sant Kabir Awards, four National Awards, and four He was also awarded a National  Certificate of Merit.

 This special award for women handloom weavers is called “KamaladeviChattopadhyay – Awards”. The handloom cluster of Jaipur on August 7, 2018, saw the presentation of seven awards to women weavers during National Handloom Day.

3. Comprehensive Handloom Cluster Development Scheme (CHCDS) - It is implemented for the development of Mega Handloom Clusters covering at least 15000 to 25,000 handlooms.

The financial assistance was provided as a government contribution of between Rs 400 billion and Rs 700 billion will be provided over five years.  As announced in the budget, eight mega handloom clusters will be taken up. Varanasi, Sivasagar (2008-2009), Virudhunagar, Murshidabad (2009-10), Prakasam, Guntur District, Godda District and Adjacent Districts (2012-13), Bhagalpur, Trichy (2014-15).

The scheme will fully fund components such as conducting diagnostic studies, designer engagement, product development, raw material corpus, construction of work sheds (for BPL/SC/ST/weavers), and skill development. Meanwhile, components such as technology modernization, design studios including computer-aided design systems, marketing complex, value addition (establishment of garment sector), common infrastructure, and advertising will be funded around 80% by the  Government of India.

4. Yarn Supply Scheme (YSS)  Yarn Supply Scheme: Yarn Supply Scheme is being implemented across the country to ensure the availability of all types of yarn at millgate prices. This program is implemented by the National Handloom Development Corporation.

 Under this program, fares are refunded and a 2% base management fee is passed on to the base operating agency. There is also a 10% price subsidy on hank yarn, which applies to cotton yarn, domestic silk yarn, and woolen yarn, with limited quantities.

5. Revival, Reform, and Restructuring (RRR) package - The RRR package was aimed at covering all viable and potentially viable apex and principal textile cooperatives (PWCs). The level of support for textile associations and individual weavers was based on audits and recommendations of the state Implementation, Monitoring, and Review Committee. 

Check Eligibility: Just as important as identifying the right grant or subsidy program is ensuring your handloom enterprise meets the required eligibility criteria. These can vary concerning the size, turnover, and age of the enterprise.

Preparing a Decent Application:

Business Plan: A detailed, well-written business plan shows you've thought out your business's future course, making your application more effective.

Project Report: If the grant is for a specific project, create a thorough Project Proposal Report outlining the purpose behind the project, Focused Area of work, methods, timelines, and expected outcomes of the project.

Financial Statements: Showcase a clear understanding of your financial situation. Ensure your statements are up-to-date and accurate.

Follow Up:

After submitting your application, make sure to follow up. Being proactive can demonstrate your commitment and enthusiasm.

Leverage the Grant or Subsidy

Utilize Funds Efficiently: Govern your funds wisely, sticking to what was outlined in the application. Misappropriation of funds could lead to penalties and can hurt the chances of getting future support.

Maintain Accurate Records: Keep minutely detailed records of how the funds are used. This transparency could be beneficial in the event of audits or evaluations.

Leverage for Growth: Use the extra funds to innovate, expand your product range, or reach a larger market. The goal should be sustainable growth and competitiveness.

Conclusion:

Handloom enterprises, deeply embedded in cultural and economic fabrics, play a crucial role in preserving traditional crafts while contributing significantly to livelihoods, particularly in rural and semi-urban areas. These enterprises, often small-scale and family-run, are bastions of unique regional handloom styles, each telling a story of heritage and artisanal skills passed down through generations. Despite their cultural richness and economic potential, handloom artisans face numerous challenges, including outdated equipment, limited market access, and a lack of financial resources, which hinder their growth and sustainability. Recognizing these challenges, governments have stepped in with various support measures, including financial aid in the form of grants and subsidies. These efforts aim to equip artisans with modern technology, expand their market reach, and enhance their skills to meet changing consumer demands. Schemes like the Handloom Weavers’ Comprehensive Welfare Scheme and the National Handloom Development Programme have been instrumental in providing insurance, education, and financial support to weavers. The introduction of Weaver MUDRA schemes, marketing support, and the establishment of handloom clusters are steps towards modernizing this sector while preserving its traditional essence. These governmental initiatives are not only vital for sustaining the handloom industry but also play a pivotal role in preserving cultural heritage, promoting sustainability in textile production, and empowering communities economically. Leveraging government grants and subsidies can provide a substantial advantage to your handloom enterprise. The process may seem daunting at first, but with a little time, effort, and strategic planning, it can be a pathway to new opportunities for growth and success.

Remember, the goal of these initiatives is to uplift and empower businesses like yours. So don't hesitate – begin your research, prepare your application, and set your enterprise on the path to further success.