Lok Sabha Question No. 387 (UNSTARRED), answered on 2017-12-18
Subject: Promotion of Cottage Industries
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: JANARDAN MISHRA

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO.387 TO BE ANSWERED ON 18.12.2017

## PROMOTION OF COTTAGE INDUSTRIES

## 387. SHRI JANARDAN MISHRA:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a)   the significance of cottage industry in the Indian economy;
- (b) the types of difficulties being faced by the cottage industry in the country at present; and
- (c) the  remedial  measures  being  taken by  the  Government  to  address  these problems and to promote the Cottage Industries in the country?

## ANSWER

## MINISTER OF STATE (INDEPENDENT CHARGE) FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI  GIRIRAJ SINGH)

(a): The Cottage Industries play an important role in the Indian Economy and generation of employment opportunities to the unemployed youth of the Country. Cottage Industries not only play a crucial role in providing large employment opportunities but also help in Industrialization of  rural  and  backward  areas  of  the  country  thereby  reducing  the  regional  imbalance,  assuring more equitable distribution of national income and wealth. It also contributes enormously to the socio economic development of the country.

Khadi  and  Village  Industries  Commission  (KVIC)  is  engaged  in  promoting  and  developing Khadi  and  Village  Industries  for  providing  employment  opportunities  in  rural  areas  thereby strengthening the rural economy of the country. Khadi and Village Industries has been identified as one of the major organization for generating sustainable employment in the non-farm sector. During  the  year  2016-17,  the  Khadi  and  Village  Industries  sector  as  a  whole  generated employment  opportunities  to  136.40  lakh  person  and  also  recorded  production  and  sales  of Rs.42631.09 crore and Rs.52138.21crore respectively during 2016-17.

(b)&(c): The major challenges faced by the Cottage Industries in the country is credit flow from the financing institutions and also the marketing of Khadi and Village Industries Products.

To overcome this challenge, the handholding support is being provided to the Khadi Institutions and Village Industries Units for availing financial assistance from the Banks under the Scheme namely Prime Minister's Employment Generation Programme (PMEGP) and SFURTI.

Under  the  PMEGP  Scheme,  any  individual  can  avail  credit  from  Banks  to  set  up  microenterprise  in  the  non-farm  sector.  General  category  beneficiaries  can  avail  of  margin  money (MM) subsidy of 25% of the project cost in rural areas and 15% in urban areas.

For beneficiaries belonging to special categories such as SCs, STs, OBCs, minorities, women, ex-servicemen,  physical  Handicapped,  beneficiaries  belonging  to  NER,  hill  and  border  areas, etc.,    the  MM  subsidy  is  35%  in  rural  areas  and  25%  in  urban  areas.  The  maximum  cost  of project is ₹ 25 lakh in the manufacturing sector and ₹ 10 lakh in the service sector.

Ministry  through  the  KVIC  and  the  Coir  Board  has  also  been  implementing  a  cluster-based scheme  named  Scheme  of  Fund  for  Regeneration  of  Traditional  Industries  (SFURTI)  under which  khadi,  village  industries  and  coir  clusters  have  been  taken  up  for  development  by providing  them  with  improved  equipments,  common  facilities  centres,  business  development services, training, capacity building and design and marketing support, etc.

To overcome the marketing challenges of Khadi and Village Industries Units, KVIC organized exhibitions at district level, State level and National level and also invites beneficiaries to exhibit and sale their products.KVI Units are also supported with financial assistance to participate in International Exhibitions.

Coir Board:(i) Coir UdyamiYojana (formerly known as REMOT Scheme) is a credit linked subsidy scheme, which provides assistance for setting up of coir units with a maximum cost of project upto Rs.10 lakhs plus working capital, which shall not exceed 25% of the project cost. The  pattern  of  assistance  is  40%  as  Govt.  subsidy,  55%  as  loan  from  Banks  and  5%  as beneficiary contribution. Scheme is open to all individuals, companies, SHGs, NGOs, Institutes, etc.  (ii)  Mahila  Coir  Yojana(a  component  of  Coir  Vikas  Yojana-CVY)  is  an  exclusive  skill development  programme  for  rural  women  artisans  in  coir  sector.    Training  is  provided  in spinning  of  coir  yarn/various  coir  processing  activities.  The  scheme  envisages  distribution  of motorized ratts/motorized traditional ratts and other coir processing equipments at 75% subsidy subject to a maximum amount of Rs.7500/- on successful completion of the training programme. During the training period, the women artisans are given a stipend amounting to Rs.1000/- per month.    Coir  VikasYojana  also  includes  Skill  Development  &  Training  Programme  in  coir sector, Domestic & Export Market Promotion and Development of Production Infrastructure.

In addition, the Ministry aims to promote the cottage industries in the country by encouraging and  providing  the  artisans  a  platform  to  showcase  their  products  in  various  forums  such  as District  level,  State  level  and  National  level  exhibitions  and  fairs.  The  best  products  and processes are also being supported to be performed outside the country through schemes such as Market Promotion and Development Assistance (MPDA). Ministry through KVIC also provides different skill training to the potential entrepreneurs through the 39 Multi-Disciplinary Training Centres (MDTC) of KVIC and RSETIs. The enterprises can also avail benefits of other schemes of the Ministry such as assistance for ISO Certification, Bar Codes, etc.