MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI VIRBHADRA SINGH)
(a)&(b) Khadi and Village Industries Commission (KVIC) is a statutory body established under
KVIC Act 1956, mandated to promote and develop khadi and village industries (KVI) through
generation of employment opportunities in rural areas, there by creating self-reliance amongst
the people and building up a strong rural community spirit. KVIC has been implementing various
schemes of the Ministry of Micro, Small and Medium Enterprises and its functioning to a large
extent is reflected in the production and sale of KVI products as well as employment generated
in the sector. KVIC has not been mandated to be a profit making organization, its activities
are intended usher the sector into an era of growth, increased income and employment and
increased artisans welfare. The figures of production, sale and employment of KVI products
during the last five years are shown in the table below, which show that the sector has
consistently grown in recent times.
YEAR PRODUCTION SALES EMPLOYMENT (Rs.crore) (Rs.crore) (Lakh persons) KHADI V.I.# Total KHADI V.I.# Total KHADI V.I.# Total
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
2005-06 468.30 11915.54 12383.84 628.69 14647.33 15276.02 8.68 15.02 18.76
2006-07 491.52 13537.19 14028.71 663.19 16899.21 17562.40 8.84 80.08 88.92
2007-08 543.39 16134.32 16677.71 724.39 20819.09 21543.48 9.16 90.11 99.27
2008-09 585.25 16753.62 17338.87 799.60 21948.59 22748.19 9.50 94.41 103.91
2009-10 608.66 17508.00 18136.98 867.01 23254.53 24121.54 9.81 98.72 108.53
# Estimated
The following are some of the major steps taken by the Government to strengthen the KVI Sector
in the country.
(i)Introduction of Market Development Assistance (MDA) Scheme on production of khadi with effect
from 01.04.2010 to incentivize production and marketing of khadi and Polyvastra besides
earning 25% of the assistance to provide for financial incentives to artisans.
(ii)Making available concessional credit (@ 4% interest) to khadi institutions under the
Interest Subsidy Eligibility Certificate (ISEC) Scheme;
(iii)Providing financial support to institutions under the Scheme for Enhancing Productivity
and Competitiveness of khadi industry and Artisans;
(iv)Providing better work environment to khadi spinners and weavers under the Workshed Scheme
for Khadi Artisans;
(v)Developing around 100 clusters of khadi, village industries and Coir under Scheme of Fund
for Regeneration of Traditional Industries (SFURTI) with improved equipment, business
development services, training, capacity building and exposure visits, design and marketing
support and common facility centres.
(vi)Apart from the above, Department of Economic Affairs, Ministry of Finance has tied up
funds from Asian Development Bank (ADB) amounting to US$150 million over a period of three
years from 2009-10 for implementing a comprehensive Khadi Reform Programme worked out in
consultation with ADB and KVIC. Under this reform package, it is proposed to revitalize the
khadi sector with enhanced sustainability of khadi, increased incomes and employment to
artisans and increased artisans welfare. Initially, the programme will be initiated in 300
khadi institutions in keeping with the needs of regional balance, geographical spread and
inclusion of backward areas.
(vii)The Government in the Ministry of MSME is also implementing Prime Minister’s Employment
Generation Programme (PMEGP), a credit-linked subsidy programme since 2008-09 through KVIC for
generating self-employment opportunities through establishment of micro enterprises by
organizing traditional artisans and unemployed youth, helping in preventing their migration
besides increasing their earning capacity. At the State/Union Territories level, the scheme
is implemented through field offices of KVIC, State/Union Territory Khadi and Village
Industries Boards (KVIBs) and District Industries Centres (DICs) with involvement of Banks.
Under this programme, beneficiaries can establish micro enterprises inter alia, under Mineral
Based Industry; Forest Based Industry; Agro Based and Food Processing Industry, Polymer and
Chemical Based Industry, Rural Engineering and Bio-Technology Industry, Hand Made Paper &
Fibre Industry and Service Industry, by availing of margin money subsidy of 25 percent of
project cost for units in rural areas to be set up by beneficiaries belonging to general
category, which will be 35 percent for beneficiaries belonging to special categories such as
scheduled cast/scheduled trible /Women and others through the implementing agencies and
loans from Banks, etc., for projects costing upto Rs.25 lakh each in the manufacturing
sector and upto Rs.10 lakh each in the services sector.
