Ministries of Power & Textiles join hands for SAATHI initiative

Ministries of Power and Textiles have joined hands under SAATHI (Sustainable and Accelerated Adoption of efficient Textile technologies to Help small Industries) initiative.
Under this initiative, Energy Efficiency Services Limited (EESL), a PSU under Ministry of Power, will procure energy efficient powerlooms, motors and rapier kits in bulk and provide them to small and medium Powerloom units at no upfront cost.

Key Facts

The SAATHI initiative will be jointly implemented by EESL and office of Textile Commissioner on pan-India basis. It will be implemented in key clusters such as Erode, Surat, Ichalkaranji, etc. It is based on the aggregation, bulk procurement and financing model that EESL has successfully deployed in several sectors like LED bulbs, Smart Meters and Electric Vehicles.
Under this initiative, unit owner does not need to allocate any upfront capital cost to procure these equipment and also not need to allocate additional expenditure for repayment. The repayments by unit owner to EESL will made from savings that accrue as result of higher efficiency equipments and cost savings.

Benefits

The aggregation of demand and bulk procurement will lead to reduction in capital cost and benefits of it will be passed on to powerloom units so that their repayment amount and period would reduce. Moreover, use of these efficient equipment will result in energy savings and cost savings to unit owner and they can repay in instalments to EESL over a 4 to 5 year period.

Background

The Powerloom sector in India is predominantly an unorganized sector and has a large number of micro and small units which produce 57% of total cloth in country. There are total 24.86 lakhs Powerloom units in the country, most of them use obsolete technology.
Government is implementing INSITU upgradation of plain Powerlooms as part of Power Tex India Scheme with a view to upgrading the technology. Under it, plain Powerlooms are attached with process control equipment leading to higher productivity, better quality and more than 50% additional value realisation. So far, 1.70 lakhs plain powerlooms have been upgraded under scheme by providing government subsidy.

Month: Current Affairs - October, 2017