While the handloom sector is in a crisis, the move to shift the regional office of the National Handloom Development Corporation (NHDC) from Kannur as part of a restructuring plan has raised concerns among handloom cooperative societies and exporters.
While NHDC officials declined to comment, sources said a decision had been taken and the regional office would be converted back to a branch office.
The regional office may be shifted to Bengaluru from where it would be overseeing Kerala operations. The decision had been taken as the volume of business had drastically come down in the State, he added.
The Kerala Textile Export Organisation said the move would hit the handloom sector in the State, which had huge potentials.
It said the sector was struggling now due to the slowdown and various other factors.
K.P. Divakar, member of the organisation, said the NHDC had been playing a pivotal role in providing quality yarn, jute, coir, and other raw material for the sector, which helped to control prices in the domestic market and gave a competitive edge in the export market.
However, the decision of the Ministry of Textiles to shift the office had come during the outbreak of COVID-19, which had affected the domestic and international markets.
Communist Party of India (Marxist) district secretary M.V. Jayarajan said the benefit of transportation subsidy was provided by the regional office to cover the cost of yarn delivery.
“With the relocation of the regional office to Bengaluru, there will be a delay in getting the subsidy amount. This will significantly affect the operations of handloom establishments,” he said adding that it would impact artisans in the traditional sector.
Business volume
The NHDC had good business volume and a turnover of ₹120 crore in 2017-18, said a retired official on condition of anonymity. However, there was a sharp decline in business which stood at ₹49.6 crore in March 2020.
This he attributed to the decision of the Centre to cut the subsidy provided to exporters under the Mills Gate Price Scheme in 2019. This scheme gave subsidy of 2% to yarn and 10% for jute and coir.
The subsidy was limited to handloom cooperative societies, which apparently focussed more on production of school uniforms than local production. This impacted the societies, which were now struggling to survive.
The State government’s decision not to avail itself of the 10% hank yarn subsidy scheme, which many other States accepted, further affected the cooperatives. Now the shifting of the office would lead to procedural delays in extending the benefits and in affective implementation of the scheme, he said.