National Handloom Development Programme (NHDP) to be implemented during the XII Plan has been formulated as a centrally-sponsored plan scheme approved by the Planning commission merging, with or without modifications

• Revival, Reform and Restructuring (RRR) package
• Institutional Credit component of Integrated Handlooms Development Scheme (IHDS) as Concessional Credit, and
• Comprehensive Handlooms Development Scheme (CHDS).

CHDS, a component of NHDP, has been formulated by merging three plan schemes i.e.Integrated Handlooms Development Scheme

Marketing & Export Promotion Scheme
Diversified Handlooms Development Scheme implemented during 11th Plan
Out of the above schemes, the following two schemes are being implemented by NABARD.

a) Revival, Reform and Restructuring (RRR) package
b) Comprehensive Handlooms Development Scheme (CHDS)

(a) Revival, Reform and Restructuring Package for Handloom Sector

The RRR package was aimed at covering all viable and potentially viable apex and primary weaver cooperative societies (PWCs). The quantum of assistance for weaver societies and individual weaver was based on audits and recommendation of state implementation, monitoring and review committee.

The objectives of the financial package were:

a) Loan waiver and recapitalization of handloom weavers’ cooperative societies
b) Waiver of loans to individual weavers
c) Strengthening of weaver cooperative societies
d) Three percent interest subsidy for fresh loans to be changed to Six percent subsidy for fresh loans
e) Credit guarantee for fresh loans (administered by SIDBI)
f) Training for the functionaries and
g) Loss assessment exercise

As per the guidelines of RRR package, all viable and potentially viable Apex and Primary weaver societies (as per the package norms) were to be covered under the package. The quantum of assistance to be made available to each weaver society is linked to special audit on the basis of the audited Financial Statements (Balance sheet & P/L Account).

(b) Under Concessional Credit component NABARD administers following two sub-components

• Interest subsidy: To provide subsidized loan to handloom sector at the interest rate of 6% for a period of three years, the quantum of interest subsidy to be borne by the Government of India is for three years and limited to the difference between the actual rate of interest as applicable and charged by the Banks and 6% to be borne by the borrower. However, the GoI interest subvention is capped at 7%.
• Margin money assistance to a maximum of Rs. 10,000 per weaver is provided, which enables the handloom weavers, their Self-Help Groups (SHGs) and Joint Liability Groups (JLGs) to leverage this amount for borrowing loans from the banks. However, weavers’ cooperative societies, weavers’ producer companies, etc. are not be eligible for the margin money assistance. In case, the requirement of margin money for the loan required by the weaver is more, then the beneficiary or State Government or Implementing Agency or in any combination thereof will be required to contribute additional amount of margin money.