Higher Yarn Bank Corpus Fund Under Powertex Helps Surat Powerlooms

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Higher Yarn Bank Corpus Fund Under Powertex Helps Surat Powerlooms

The Union Textile Ministry's recent move to double the corpus fund for yarn banks to Rs 2 crore, and to halve the bank guarantee to 25%, will benefit the powerloom sector, especially in Surat.

Pandesara Weavers’ Co-operative Society president Ashish Gujarati said that members are happy that the corpus fund of the yarn bank has been increased from Rs 1 crore to Rs 2 crore. Earlier, yarn banks were able to cater to only 100 member weavers. After the corpus fund increase, yarn banks will be able to cater to around 200 weavers. Yarn banks have demanded that the corpus fund be increased to Rs 15 crore, Gujarati said.

An official of Ved Road Art Silk Small Scale Co-operative Federation said there were more than one lakh weavers in Ved Road and Pandesara clusters but the yarn bank would be able to cater to only 100 units initially. The yarn is procured from frontline spinners in bulk quantity at concessional rates. Two years ago, the ministry of textiles had formed two special purpose vehicles namely, Ved Road Art Silk Small Scale Co-operative Federation and Pandesara Weavers Co-operative Society to set up yarn banks in the powerloom clusters of Ved Road and Pandesara, which happen to be India's largest man-made fabric hub.

Yarn banks serve two purposes. Firstly, it gets yarn samples from around the world as well as stores these. Later, the local industry gets access to these yarn samples of global standards, does further research and comes out with innovative products. Secondly, there is also a price benefit.

These yarn banks were started with an initial corpus fund of Rs 1 crore, to purchase yarn from the open market and sell it at concessional rates to 1,000 weavers who were initial members. Yarn banks provide an opportunity to weavers to check price fluctuations, curb the presence of middlemen, allow weavers to procure yarn on credit as well as repay the amount in instalments. Surat has around 5.5 lakh power loom machines which produce three crore metres of fabrics everyday and employ around seven lakh workers.