Bhubaneswar: The Odisha government on Wednesday signed a tripartite memorandum of understanding (MoU) with Government of India and Nabard.

State secretary of textiles, handloom and handicraft Usha Padhee, director of textiles G B Swain and chief general manager of the Nabard regional office, Bhubaneswar K K Gupta signed the MoU in the presence of the textiles and handloom minister Sarojini Hembram at the State Secretariat here.

The package aims at removing the choked lines of credit flow to handloom sector, supporting fresh with interest flow with interest subvention and credit guarantee and ensuring reform in this sector.

The MoU is primarily meant for waiver of loans incurred by the handloom weavers and cooperative societies of the state as on 31 March 2010.

Waiver of 100 percent principal loan and 25 per cent interest will be provided by the Centre and the state government at a ratio of 80:20 respectively while the remaining 75 percent interest will be borne by the concerned bank.

The package includes 434 potentially viable primary weavers’ societies (PWCS) and one apex weavers’ cooperative society (Boyankia) of the State. Besides, it will also benefit individual handloom weaver with a maximum loan waiver of Rs 50,000.

Apart from waiving the loan, the MoU will facilitate PWCS and individual weavers to avail fresh credit loan from the banks.

The state government has made a provision of Rs 30 crore in the 2012-13 budget towards state share.

Regarding the status of implementation of the package in the state, sources in the NABARD said that waiver of overdue loans of individual weavers for Rs 7.87 crore submitted by RRBs has been approved.

While a special audit of Boyanika has been completed, special audit of 434 eligible primary weavers’ cooperative societies, to be covered under the package, has been taken up.

The package will benefit 5861 individual weavers, 1594 self-help groups (SHGs) and 434 PWCS.

It may be mentioned that the Centre on November 28 last year had announced revival, reform and restructuring package of Rs 3000 crore for handloom sector for all the states.

Subsequently, Nabard had approved a total outlay of Rs 3884 crore for implementation.