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Union Budget: Handloom sector gets a raw deal

Handloom weavers demand recognition as MSMEs
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Handloom weavers demand recognition as MSMEs

Highlights

The Budget presented by Nirmala Sitharaman this year has not brought any cheer to the handloom sector which has been eagerly waiting for rescue from the dire conditions facing it.

The Budget presented by Nirmala Sitharaman this year has not brought any cheer to the handloom sector which has been eagerly waiting for rescue from the dire conditions facing it. There is no change in the budget for handloom sector, from the previous interim budget.

It is a mere Rs 485 crore. The government which swears by the handloom sector and seeks to promote it greatly should ponder over it once. Expectations of the sector were very high. Experts point out that last year the budget came in mid-year, hence, there was a hope that budget may see an increase through expenditure and revision (with the assumption that the Finance Minister then, did not have time to focus on handloom sector).

However, the revision was lesser than the allocation of Rs 456.80 crore – Rs 445.94 crores now. This is a year which is witnessing an economic recession with employment on a downward slide. purchasing power has taken a dent and rural consumption has nosedived, there were expectations that this budget would infuse funds into rural economy. Increasing handloom budget was one route for this and for stabilising the economy, increasing employment.

Economists probably forgot about the importance of handloom sector in terms of employment potential (especially in rural areas), its positive impact on environment (thus responding to responsible consumption and sustainable production) and would have been a bulwark in stabilising Indian economy (non-handloom textiles are always volatile and monopolised), as experts argue. Previously, handloom sector got a big blow through a huge reduction from Rs 604 crore in 2017-18 to a mere Rs 386.09 crore in 2018-19.

By then, it was already reeling under the twin effects of demonetisation and the levy of GST. Never before, in the last 100 years, handloom sector has seen such a low. Demonetisation has severely affected handloom weavers, as handloom production is part of a huge informal economy. Cash crisis has hit them badly, and the tight norms of cash withdrawals have robbed them of any non-government, private money lender support as well.

With losses and mounting debts, handloom weavers hoped that the government would announce relief and enable some direct cash transfers. Has reason eluded the government? It is not even doing any serious consultations. The only welcome move has been the celebration of National Handloom Day, on August 7.

This celebration, initiated and actively participated by Prime Minister Narender Modi, has raised a lot of hopes and expectations among handloom consumers, producers and economists. Handloom sector budget is reduced drastically, across all schemes. With rising cost of production, unfair competition, and subsidies to rival sectors, handloom sector is getting killed deliberately.

Huge cuts in yarn supply scheme allocations is bound to have its impact. This impact would double when one considers the raising costs of raw material, mostly yarn (silk, cotton, wool and other natural fibres), due to inflation, GST and fossil fuel prices.

With Make-In-India campaign, and the government leaders being followers of Madan Mohan Malaviya's economics, the weavers in general hoped that handloom sector would receive major thrust in government budgets.

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