The handloom industry is crying foul as the Union Budget 2018-19 decided to slash the fund allocation from INR 604 Crore to INR 386.09 Crore. The entire industry has strongly criticized the government for such decision.
The handloom industry is already limping due to the back to back amendment of demonetization and GST. The representatives said that more than 1 Crore Indians earn their bread and butter by working in the handloom industry.
Narasimha Reddy Donthi, President, Chetna Society, an NGO, said “Handloom sector budget is reduced drastically, by 36%, across all schemes. With rising cost of production, unfair competition, and subsidies to rival sectors, handloom sector is being killed deliberately.”
The reduction of fund allocation for the limping industry by almost one third can prove to be a drastic decision made by the government. The handmade products are already facing a huge threat from the assembly-line products in the market. Without the aid of the government, it will become very difficult for the industry to continue working and survive in the cutthroat competition.
Reddy added that the schemes have been cut down considerably. This will bring despair throughout the industry in the country. If the cost of the raw material is raised then the entire industry will face a big downfall within a year. On the other hand, it has been found that the industry is helplessly borrowing money at heavy interest rates to clear the debts.
Reddy also said “The most critical component of their production, working capital flows are drying up from ‘traditional sources’ and institutional mechanisms. NABARD (National Bank for Agriculture and Rural Development), the only comparatively cheap source of finances for handloom sector has drastically reduced its exposure. Resultantly, handloom weavers were forced to find ‘expensive’, private sources of finances.”