Hank yarn obligation in Textile Sector
The hank yarn obligation scheme was designed to provide hank yarn to
handloom weavers at a reasonable price and in a timely way. The scheme makes it
compulsory for yarn spinners to earmark certain per cent of their production
for handloom weavers. Spinners are typically less keen to reel cone yarn into
hank yarn as the process adds to their costs, yarn in that form garners a lower
price in the market and it services a diminishing market. Additionally, as many
spinners also operate powerlooms, they favour cone yarn to supply their own production.
Uneconomical and out of step with the current large-scale, mass production of cone
yarn, hank yarn production was falling and as a result handloom weavers were increasingly
faced with a decreasing supply of their primary input.
Under the first hank yarn reservation scheme, initiated in 1993, private
spinners were ordered to produce half of their yarn in hank form, the type of
yarn required by handloom weavers. All remaining output could be produced in
cone form for sale to textile mills. The goal of the first hank yarn obligation
was thus to improve the availability hank yarn at a reasonable price for
handloom weavers.
In 2000, the scheme was altered in a way which unfortunately allowed
spinners to scuttle their obligations. Alterations gave spinners the leeway to
fulfill their obligations through 1) filling the deficit by transferring the
obligation on to other spinning mills or 2) by carrying forward the deficit to
the following year.
Initiatives like
this one and the CENVAT removal effectively subsidize handloom weavers by
making yarn cheaper. The production of hank yarn is
uneconomical, wasteful, very much labour oriented and impacting adversely on
the economic viability of the spinning units. Though supply of yarn to the
vulnerable handloom sector is no doubt necessary but it should not be done at
the cost of the spinning sector, more so in the context of the on going
integration of world textile market.
The conversion of cone yarn to hank yarn is highly labour intensive and
mills have to incur an additional cost of about Rs. 2 to Rs. 10/kg. of yarn
depending on the counts spun as compared to cone yarn.
.A Hank of Yarn Looks like above. It is used in Traditional Hand-loom Machines as compared to cone yarn in moderen Power Loom Machines. Cone yarn looks like following:-
