MINISTER OF MICRO,SMALL & MEDIUM ENTERPRISES(SHRI MAHABIR PRASAD)
(a): At present, no scheme is implemented by the Khadi and Village Industries Commission (KVIC),
by providing loans from its budgetary source, except in the case of loans to a few khadi
institutions in the North Eastern Region. However, KVIC has been implementing the following two
schemes, under which loans are provided by the banking sector:
(i) a Central sector credit-linked subsidy programme, titled the Rural Employment Generation
Programme (REGP), in collaboration with the Khadi and Village Industries Boards (KVIBs) of the
respective States/Union Territories (UTs). Under this Programme, eligible entrepreneurs are
assisted in establishing village industries, by availing of loans from public sector scheduled
commercial banks, selected regional rural banks, cooperative banks, etc., and also margin money
assistance (subsidy) from the KVIC, for projects with a maximum cost of Rs. 25 lakh. Entrepreneurs
belonging to the categories of scheduled castes, scheduled tribes, other backward classes,
physically handicapped, ex-servicemen, women, etc., are entitled to higher margin money assistance.
(ii) Interest Subsidy Eligibility Certificate (ISEC) scheme for making available working capital
to the khadi institutions from banks at the concessional rate of interest of 4 per cent per
annum. The institutions have to pay interest of only 4 per cent and the difference between the
actual rate of interest and the 4 per cent is paid by KVIC as interest subsidy to the banks.
Since loan funds are provided by banks, under the above mentioned two schemes, the rules pertaining
to loan payment are determined by financing banks.
(b), (c) & (d): Do not arise.
(e) & (f): Yes, Sir. REGP was launched in 1995-96 with the objective to promote new village
industries on project based funding, replacing the interest subsidy provision to village
industries under the ISEC Scheme. Activities relating to khadi figure in the `negative list` of
the REGP along with some other activities which cannot be financed under REGP. Khadi/Polyvastra
units are continued to be financed with concessional rate of interest under ISEC scheme. In
addition, the khadi units are also provided the benefit of working fund as well as rebate on the
sale of khadi products, which are not available in REGP.
(g): Khadi units are provided financial assistance under the following schemes implemented
throughout the country, including Karnataka:
(i) Khadi institutions are permitted to retain the working capital earlier made available to them
from the budgetary resources through KVIC, as working fund so long as they maintain certain
level of agreed production/sales.
(ii) Interest subsidy under the ISEC Scheme as detailed under para
(ii) of the answer to part (a) earlier. During 2006-07, bankloans amounting to Rs. 233.62 crore
were made available to the khadi institutions all over the country, of which the khadi institutions
in Karnataka accounted for loans amounting to Rs. 2.55 crore.
(iii) Rebate on sale of khadi and khadi products: During 2006-07, Rs.2.67 crore was made available
to the khadi institutions in Karnataka under this scheme
