PowerTex India Scheme: Components of PowerTex India

The government introduced the Schemes for Powerloom Sector Development (SPSD), a Central Sector Plan Scheme, from the 11th power loom sector development plan. It was in operation from 2007-08. The scheme was extended up to 31.03.2017. It was continued with additional components like corpus for yarn bank, common facilities centres and tex venture capital fund.

Certain components or sub-components were discontinued, such as the computer-aided design centres, the survey of the power loom, publicity/print publicity, development and upgradation of skills, power loom cluster development, film on power loom/TUFS, etc. The scheme was renamed as PowerTex India and was effective from 01.04.2017 to 31.03.2020. 

Components of PowerTex India 

• In situ-upgradation of plain power looms
• Group workshed scheme
• Yarn bank scheme 
• Common Facility Centre (CFC) scheme 
• Solar energy scheme for power looms 
• Pradhan Mantri Credit Scheme for power loom weavers 
• Grant in aid and modernisation or upgradation of power loom service centres 
• Tex venture fund
• Facilitation, IT, awareness, market development and publicity for power loom schemes

Objectives of PowerTex India 

The objectives of each component under the PowerTex India scheme are as follows:

In situ-upgradation of plain power looms

• To upgrade existing plain looms to shuttleless or semi-automatic looms 
• To improve productivity and quality of the fabric produced by fixing certain additional kits or attachments 
• To enable existing plain looms to face the competition in international and domestic markets

Group workshed scheme

• To establish group worksheds for shuttleless looms in a new or existing cluster
• To organise power loom units in a cluster
• To provide improved working conditions in terms of more work environment and space for power looms 
• To improve the work efficiency to enhance the power loom unit's competitiveness in the global market

Yarn bank scheme 

To enable small power loom weavers to purchase yarns at wholesale rates and in large quantities by avoiding local supplier's or middle man's brokerage charges by providing interest-free corpus funds to Special Purpose Vehicle (SPV) or consortium of power loom weavers.

Common Facility Centre (CFC) scheme 

To establish Common Facility Centres (CFC) in different power loom clusters and provide pre and post-weaving and other infrastructure facilities to power loom units or weavers, power loom industry associations and other organisations.

Solar energy scheme for power looms 

• To alleviate the power cut shortage problem being faced by the decentralised power loom units in India 
• To improve efficiency, utilisation, productivity, etc., to face the international and domestic markets competitively 
• To provide capital subsidy or financial assistance to small power loom units for installing Solar Photo Voltaic (SPV) plants

Pradhan Mantri Credit Scheme for power loom weavers 

To provide timely and adequate financial assistance to the power loom weavers for meeting credit requirements, investment needs (term loans) and working capital cost-effectively and flexibly.

Grant in aid and modernisation or Upgradation of power loom service centres 

• To enable power loom weavers in different clusters to get services from power loom service centres
• To provide government assistance for the modernisation of the existing infrastructure
• To facilitate power loom service centres and other facilities required in clusters for common services

Tex venture fund

To assist the power loom and other allied units under the Micro, Small and Medium Enterprises (MSME) sector and boost their leverage commercial bank debt, and net worth, improve sales turnover and manufacturing capacity, increase profitability and competitiveness by way of investments in instruments convertible into equity or equity shares of textile units through the tex venture fund.

Facilitation, IT, awareness, market development and publicity for power loom schemes

• To provide facilitation services to power loom weavers like registration services, helpline, bank services, SMS alerts, etc 
• To establish an online portal for power loom schemes 
• To disseminate information about technology, create awareness about schemes and products for the benefit of the power loom workers or weavers 
• To provide power loom weavers with a platform to market their products at cluster, regional, national and international level 
• To spread publicity of power loom schemes in print and electronic media

Eligibility of PowerTex India 

The eligible beneficiaries under the PowerTex India scheme for different components are as follows:

• In situ-upgradation of plain power looms 

Power loom units having power loom permits, Udyog Aadhaar Memorandum (UAM) or SSI registration.

• Group workshed scheme

Entrepreneurs and weavers associated with power loom units, including registered cooperative societies of power loom weavers, master weavers, or new entrepreneurs in-group or individually.

• Yarn bank scheme 

Special Purpose Vehicles (SPV) constituted in the form of a trust, a registered cooperative society, a company registered under the Companies Act, 1956 and firms established under the Limited Liability Partnership (LLP) Act, 2008.

• Common Facility Centre (CFC) scheme 

Special Purpose Vehicle (SPV) with at least 11 members before establishing and running the proposed CFC.

• Solar energy scheme for power looms 

Power loom units registered with the relevant authority and having at least eight looms in the decentralised MSME sector.

• Pradhan Mantri Credit Scheme for power loom weavers 

Existing individual power loom units, new individual or group enterprises involved in weaving activity, new power loom units established by a person belonging to a Scheduled Caste (SC), Scheduled Tribe (ST) or is a woman entrepreneur.

• Grant in aid and modernisation or upgradation of power loom service centres

Powerloom Service Centres (PSC) under the Office of the Textile Commissioner.

• Tex venture fund

The power looms and allied units under the MSME sector.

• Facilitation, IT, awareness, market development and publicity for power loom schemes

Power loom weavers.

Financial assistance under PowerTex India

In situ-upgradation of plain power looms

Financial assistance is provided for in situ-upgradation of existing plain power looms to shuttleless rapier looms. The Government of India will provide financial assistance in each in situ upgradation to the extent of 50%, 75% and 90% of the cost of upgradation up to a maximum subsidy of Rs.45,000, Rs.67,500 and Rs.81,000 per loom for the general, SC and ST category applicants, respectively. 

Group workshed scheme

Under this component, the subsidy is given for the construction of the group workshed as follows:

• General category - 40% of the unit cost of construction of the group workshed and dormitory or workers’ accommodation up to a maximum of Rs.400/- per sq. ft.
• SC category - 75% of the unit cost of construction of the group workshed and dormitory or workers’ accommodation up to a maximum of Rs.750/- per sq. ft.
• ST category - 90% of the unit cost of construction of the group workshed and dormitory or workers’ accommodation up to a maximum of Rs.900/- per sq. ft. 
• The maximum permissible subsidy per beneficiary will be restricted to Rs.22 lakh.

Yarn bank scheme 

Under this component, an interest-free corpus fund of up to Rs.2 crore would be provided to the Special Purpose Vehicle (SPV) or consortium formed by power loom weavers.

Common Facility Centre (CFC) scheme 

The Common Facility Centre (CFC) is entitled to the following levels of assistance from the government based on different levels of grading of power loom clusters:

• Grade A - Subsidy upto 60% of project cost
• Grade B - Subsidy upto 70% of project cost
• Grade C - Subsidy upto 80% of project cost
• Grade D and clusters in NER/J and K - Subsidy upto 90% of project cost

The clusters are graded by a committee constituted by the Textile Commissioner.

Solar energy scheme for power looms 

The government of India will provide financial assistance or capital subsidy to the extent of 50%, 75% and 90% of the basic cost of the solar energy plant (cost of solar panel + batteries + inverter) to the applicants of the general, SC and ST category, respectively, subject to a maximum ceiling of subsidy as per the guidelines.

Pradhan Mantri Credit Scheme for power loom weavers 

Under this component, working capital and term loan is provided up to a maximum of Rs.10 lakh under the Pradhan Mantri Mudra Yojana (PMMY), where the government will provide financial assistance on margin money at 20% of project cost with a ceiling of Rs.1 lakh per borrower with interest subvention at 6% every year up to five years. 

A composite loan is provided to meet the requirement of a purchase of machinery and plant and working capital between Rs.10 lakh and Rs.1 crore under the Standup India Scheme, where 25% margin money will be provided as a subsidy by the government.

Grant in aid and modernisation or upgradation of power loom service centres 

Under this component, a Grant-in-Aid (GIA) will be provided to the PSCs for upgrading and modernisation required in the cluster.

Tex venture fund

Under this component, a tex venture fund is created with a dedicated fund corpus of Rs.35 crore for investing primarily in companies engaged in services and manufacturing activities in the power loom industry. The Government of India would contribute Rs.24.50 crore to the fund, and the SIDBI would contribute 30% of the fund size.

The various components under the PowerTex India scheme aimed to provide financial assistance to power loom units in India for improving their manufacturing, upgradation of technology, and being competitive in the domestic and international markets. The PowerTex India scheme was effective till 31.03.2020.