Yarn Bank Scheme

• To avoid fluctuation in yarn price, the government has launched a Yarn Bank Scheme as one of the component of PowerTex India with effect from 01.04.2017 to 31.03.2020.

• The Scheme provides interest-free corpus fund up to Rs.2.00 crore to the Special Purpose Vehicle (SPV)/Consortium formed by power loom weavers to enable them to purchase yarn at a wholesale rate and give the yarn at a reasonable price to the small weavers.


• It objectives to avoid middleman and local supplier’s brokerage charge on sales of yarn.

• There is a 1% increase in powerloom fabric production.

• The estimated production of powerloom fabric during 2018-19(Apr-Oct) is 22781 Million Square Meters (MSM) which was 22539 MSM during the corresponding period of 2017-18.

What are the eligibility beneficiaries?

• Registered Co-operative Society.

• Trusts

• Company set-up under the Companies Act, 1956 as amended.

• Firm set-up under the Limited Liability Partnership Act, 2008 as amended.


Mains Paper 3: Economy | Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

Prelims level: Yarn Bank Scheme

Mains level: The importance of textiles and apparels industry and issues related to it.

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