500 Quality Dyeing Units (QDUs) would be integrated with these HDCs to make quality dyes & chemicals available to the weavers and also important training to them in the improved dyeing practices. The QDUs would have the following three components.

1) 100 Domestic Dyeing Units for which necessary equipment and dyes & chemicals would be provided on 50% grant and 50% loan basis.

2) Micro Yarn Dyeing Units at the village or primary society level, particularly for vat dyeing to be funded equally by loan and grant.

3) Training in improved dyeing  practices through Weavers Service Centers or any other suitable agency to be funded entirely by Government grant.

Each HDC would cover a weavers concentration in a radius of about 5 kms. Except in  hilly areas or sparsely populated areas. The concerned State Government would identify the weavers concentration  and also the agency for running the HDC, which would be either a primary cooperative society with a clean track record and good record of performance or a good and viable Non Governmental Organization (NGO) which has the required  infrastructure in terms of building, storage, staff, transport, etc. for running the center. The gaps in the infrastructure would be filled by the State Government.

The management and functioning of the HDC would be free from bureaucratic control. Both the central and the State Government would, however, oversee and monitor the functioning of the HDC with a view to rendering necessary assistance to ensure its successful functioning and play the role of only a promoter and facilitator.

Each HDC would consist of at least 250 looms and about 1000 weavers, and  on an average, produce about 2.5 lakh metres of cloth every year. The first task of the HDC would be to tie-up the marketing of this cloth through State Handloom Development Corporations, Apex Handloom Cooperatives and other agencies and also with mills.

Besides participating in the international and State level exhibitions, the HDC would organize exhibitions at the district and 'taluq' levels for which necessary assistance would be provided under the scheme. The HDC may also open rural retail outlets for which also a provision has been made in the scheme.

For exports, the HDC would tie-up with the Handicrafts & Handlooms Export Corporation, Handlooms Export Promotion Council and also directly with export house.

The HDC would prepare a 'Production Plan' based on the marketing tie-ups, and make yarn dyes & chemicals and other essential inputs available to the weavers covered by it accordingly. It would also arrange training in improved dyeing practices and new designs through Weavers Service Centers , Indian Institutes Of Handloom Technology at Guwahati, Varanasi and Salem and other suitable agencies to enable the weavers to produce cloth confirming to the market demand. The entire cloth produced by the weavers covered by the HDC would be purchased by it  at remunerative prices.

The scheme for setting up 3000 HDCs and 500 QDUs is the biggest scheme ever launched for the handloom weavers in the country involving a total outlay of Rs.849.19 crores of which,Rs.321.325 crores would be Central Government grant and Rs.527.375 crores concessional credit through NABARD refinance.  It also designed to increase the coverage of handloom weavers by cooperatives from the existing about 20% to more than 50%, which would give a tremendous boost to the cooperative movement in the sector. About 30 lakh weavers who would be covered by these HDCs would also become eligible for assistance under several other schemes being implemented by the Central and State Governments. The scheme would also generate employment for a large number of handloom weavers.

The implementation of the scheme would substantially raise the earnings and income levels of the handloom weavers covered by it by diversifying their production according to the domestic and export demand and ensuring remunerative prices to them. It can reasonably be expected that this scheme would go a long way not only in bringing prosperity to the handloom weavers but also in preserving and promoting the development of their traditional skills and craftsmanship in weaving for which they are known internationally.