New Delhi: The Cabinet on Sunday approved  Rs 2,350 crore package for crisis-ridden handloom weavers, mostly concentrated in poll-bound Uttar Pradesh.

The package is part of Rs 6,234 crore scheme for handloom weavers announced last month by Commerce and Industry Minister Anand Sharma at Varanasi following an advice from Congress General Secretary Rahul Gandhi, who is extensively touring UP in the run-up to Assembly elections.

The package comprised Rs 3,880 crore for the loan waivers for three lakh individual weavers and 15,000 cooperative societies and Rs 2,350 crore for implementing a six-fold strategy, which includes providing weavers subsidised bank credit and hank yarn, sources said.

They said the Centre is showing sense of urgency in approving the scheme since the model code of conduct of the Election Commission can come into force in the near future, after which no major announcement can be made.

The Rs 2,350 crore package includes providing interest subvention of three percent for three years to the weavers who will also get subsidized yarn from the National Handloom Development Corporation.

The subsidised credit will be made available for the SIDBI, NABARD and the nationalized banks.

While the loan waiver scheme was announced by Finance Minister Pranab Mukherjee in his Budget for 2011-12, about Rs 2,350 crore package was added later during course of the year.