Odisha Interest Subvention to Handloom Sector

The State of Odisha is well known for its traditional handloom products. Handloom industry in Odisha has enormous potential to generate huge income and employment opportunities for its rural artisans. The Government of Odisha has been supporting the handloom industry and its artisans with its various schemes and programs. The interest subvention of 7% against the term and working capital loans for the individual handloom weavers was introduced by the Government to ensure the credit flow for their weaving activities. Recently, the Government of Odisha has agreed to offer an additional interest subvention of 2.5% to the weavers.

Objectives of the Scheme

The scheme which is being implemented in the State under the Mudra Weavers Scheme targets at achieving the following objectives:

To offer enough credit support in the form of term and credit loans to the handloom weavers in the State
To increase the earnings of the handloom weavers

Eligibility Criteria

The Government of Odisha grants the additional interest subvention to the individuals who fulfil the below said criteria:

Handloom weavers must be involved in the trade of weaving and other such allied activities
Weavers shouldn’t have any outstanding loan payment, including the interest amount, to be paid to any of the banks

Allocation of Loan

The loan credit amount is assessed and fixed by the Government depending upon the working capital requirement and the expenses of the tools and machineries.

The credit limit fixed for the cotton products is Rs.50,000 and 1 lakh for the silk products.
The additional interest subvention of 2.5% is offered to the loan amount with the maximum ceiling of Rs.5 lakhs per account.

The eligible beneficiaries can obtain the loan either in the form of cash or block credit and it is mandatory for the weavers to utilise the loan amount only for the purpose of handloom weaving and other related activities.

Loan Validity Period

The interest subvention rate of 2.5% disbursed by the Government of Odisha is calculated from the date of release of the loan amount to the date of repayment of the amount by the weavers or until the last payment date fixed by the respective banks, whichever is earlier. The beneficiaries can benefit from the loan amount for the period of three years up to 2022-23. The weavers are entitled under the scheme to get a waiver of 2.5% in the interest amount paid to the banks.

Implementation Method

The Director of Textiles and Handloom, Odisha, with the help of other District/Zonal Officers, monitors the operations and smooth functioning of the scheme. The interest subvention is calculated by the respective banks on the total loan amount and is disbursed to the beneficiaries’ loan account. The implementation procedure carried out by the banks are as follows:

The details regarding the approval and release of the loan amount are reported by the respective banks to the local concerned Textile Zonal Officers.
The Zonal Officers maintain an organised database of the loan amount disbursed to the weavers, register wise records of banks and the details of the weavers who were benefitted under the interest subvention scheme and forwards the details to the Director of Textiles and Handlooms, Odisha.
The corresponding banks should send a quarterly report of the claim to their Regional/Zonal/Controlling Office.
The regional/Zonal/Controlling Office, in turn, forwards consolidated claim report to the Circle Office of Convening Bank, SLBC, Bhubhaneshwar on a half-yearly basis.
The report is forwarded to the Director of textiles, Odisha by the Circle Office of Convening Bank, SLBC, for the assessment and evaluation of the claim.
On verification of the claim, the Director of Textiles approves and recommends the Circle Office of Convening Bank, SLBC to release the interest subvention amount to the corresponding banks through RTGS.
Circle Office of Convening Bank, SLBC, Bhubhaneshwar, sends a bank-wise loan disbursement statement to the Director of Textiles and Handlooms, after the release of the interest subvention amount.