J&K Handloom WC Interest Subvention

The J&K Wool Processing, Handloom & Handicraft Policy 2020 extends a 5% interest subvention on working capital to handloom units. This measure is distinct from a one-time working capital subsidy, functioning instead as a recurring reduction in borrowing costs. It lowers the effective interest rate applicable to a unit’s working capital facility.

Because handloom production typically locks in funds for several months—between the purchase of yarn and the eventual sale of goods—cheaper working capital often proves more advantageous than a capital grant. The policy specifies the 5% rate without imposing a rupee ceiling or a defined time limit. Consequently, the actual benefit varies according to the size of the working capital facility availed.

- Enrol the handloom unit under the J&K Wool Processing, Handloom & Handicraft Policy 2020. - Obtain approval for a working capital facility from your bank or financial institution. - File the interest subvention claim, attaching the sanction letter and interest debit statements. - The department checks the interest actually paid on the working capital facility. - A 5% subvention is disbursed against the interest that has been verified.

Claims are not subject to a competitive selection process. Instead, verification is carried out against the working capital sanction and the interest amount actually debited by the lending institution.