(a) whether many Khadi and Village Industries institutions in Bihar are on the verge of closure;
(b) if so, the reasons therefor;
(c) whether the Government has taken any steps for revival of these institutions;
(d) if so, the details thereof; and
(e) if not, the reasons therefor?
MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI VIRBHADRA SINGH)
(a)&(b): There are 87 khadi institutions affiliated to Khadi and Village Industries Commission (KVIC) and Bihar
Khadi and Village Industries Board implementing khadi programme in Bihar, out of which, five are in the deteriorating condition.
Khadi & Polyvastra programme in Bihar has declined during the last 10 years, because of losses suffered by a number of khadi
institution during this period. The institutions have been facing difficulties in sustaining Khadi Programme mainly because of
working capital crunch. However, KVIC has intervened and taken steps to rehabilitate five of these khadi institutions with a
special package.Khadi activity in Bihar is mostly implemented by Bihar Khadi Gramodyog Sangh (BKGS), Muzaffarpur and its district
level decentralized units. A team constituted by KVIC in 2007, after in-depth study of the state of affairs of the working of BKGS and its
decentralized units, identified reasons for deteriorating health of Khadi institutions in Bihar including the following:-
(i) Inefficiency in implementation of programme, improper utilization of funds and disproportionately large manpower in relation to the activities.
(ii) Working Capital of the institutions also getting blocked in inventory and receivable etc.
(iii) Non-transfer of immovable properties from the mother unit to the decentralized units of BKGS as a result of which, flow of fund to these
decentralized units got restricted hampering production and sales process.
(iv) Looms and Charkhas were not in good condition, which could not be replaced due to restriction of flow of fund hampering the productivity and
quality of the material being produced.
(v) As the charkhas and looms have become old, the earning capacity of the artisans did not increase in tune with the rising cost of living. Hence artisans did not get much encouragement in taking up the Khadi spinning and weaving activities in state of Bihar.
(c) & (d) : On the basis of recommendations of the team constituted in 2007, KVIC has reported that a revival package was considered by KVIC with the
following components:
Sl. No. Particular of assistance Amount(in Rs. lakh)
1. Providing 8 spindle New Model Charkhas 6.00
2. Providing improved looms 3.00
3. Providing warping unit 3.00
4. Issue of Interest Subsidy Eligibilities Certificate 14.25 (ISEC)for obtaining working capital through Bank