Indian Economy News

Govt gives tech push to revive powerloom sector

Mumbai: The Union Ministry of Textiles has introduced a technology upgradation scheme in association with Energy Efficiency Services Ltd (EESL) to revive the ailing powerloom sector.

The initiative, SAATHI (Sustainable and Accelerated Adoption of Efficient Textile Technologies to Help Small Industries), entails complete replacement of age-old technology with the most modern one without any upfront cost to be paid by powerloom owners.

EESL, a public sector entity under the Ministry of Power, would procure energy-efficient powerlooms, motors and rapier kits in bulk and provide them to the small and medium powerloom units at no upfront cost.

“The unit owner neither has to allocate any upfront capital cost to procure the equipment, nor does he have to allocate additional expenditure for repayment. In fact, repayments to EESL would be made from the savings that accrue as a result of higher efficiency equipment, and cost savings,” said Sri Narain Aggarwal, chairman, The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC).

“The aggregation of demand and bulk procurement will also lead to a reduction in capital cost, benefits of which will be passed on to the powerloom units so that their repayment amount and period would reduce,” he said.

Aggarwal said the unit owner would be required to repay the amount to EESL in instalments over four-five years. “This is the aggregation, bulk procurement and financing model that EESL has successfully deployed in several sectors like LED bulbs, smart meters and electric vehicles,” he said.

The initiative will be jointly implemented by EESL and the office of Textile Commissioner on a pan-India basis. To kick start the implementation, cluster-wise demonstration projects and workshops will be organised in key clusters such as Erode, Surat, and Ichalkaranji.

The powerloom sector in India is predominantly an unorganised sector and has a large number of micro and small units which produce 57 per cent of the total cloth in the country. There exist 2.49 million powerlooms in this country, mainly in the unorganised sector, and most of them use obsolete technology. Dealing largely in cash with no official track record, the powerloom sector was first hit by demonetisation in November last year, followed by the goods and services tax (GST) roll-out.

With a view to upgrading the technology, the government has been implementing the in-situ upgradation of plain powerlooms as part of Power Tex India. 

Under this plan, plain powerlooms are attached with process control equipment, leading to higher productivity, better quality and more than 50 per cent additional value realisation. So far, 170,000 plain powerlooms have been upgraded under the scheme, with a total government subsidy of Rs 186 crore.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.