Lok Sabha Question No. 556 (UNSTARRED), answered on 2017-02-06
Subject: KVIC Schemes
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: TAMRADHWAJ SAHU

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

## LOK SABHA UNSTARRED QUESTION NO. 556 TO BE ANSWERED ON 06.02.2017

## KVIC SCHEMES

## †556. SHRI TAMRADHWAJ SAHU:

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

- (a) the details of schemes being implemented by the KVIC to promote Khadi industry  in the country;
- (b) whether  there  is  any  scheme  for  providing  Bank  loan  on  lower  rates  of  interest  to small khadi weavers in the country and if so, the details thereof; and
- (c) whether any instructions have been issued by the Government regarding use of Khadi in Government offices/departments and if so, the details and the compliance status thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI GIRIRAJ SINGH)

(a)&(b):        The  details  of  the  schemes  for  promotion  of  khadi  are  enclosed  at  Annexure. Khadi  and  Village  Industries  Commission  (KVIC)  has  been  implementing  a  number  of schemes  to  promote  khadi  production  in  the  country  including  a  scheme  namely  Interest Subsidy Eligibility Certificate (ISEC) under which subsidy is provided by the Government to banks  to  enable  them  to  extend  credit  facilities  to  weavers  at  4%    rate  of  interest.    The difference between the bank commercial rate and 4% is reimbursed to the banks subject to the amount availed by the Khadi Institutions.

- (c): Government from time to time has issued advisories to Ministries / Departments, Public Sector Undertakings, etc. to promote use of Khadi in their offices, especially during festival seasons.  Besides, KVIC has been marketing and catering to the need of Government Departments and bulk supplies are made to Ministry of Defence; Health & Family Welfare; Paramilitary forces and other Ministries of Central as well as State Governments under Rate Contract  (RC)  agreement  with  Directorate  General  of  Supplies  &  Disposals  (DGS&D)  as well as supply of Non Rate Contract (Non-RC) items like Polyvastra bed sheets and pillow covers to Railways etc. in order to increase the use of Khadi in Government offices/Departments.

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## Market Promotion and Development Assistance scheme (MPDA)

MPDA scheme has been formulated as a unified scheme in place of Market Development Assistance  (MDA)  implemented  in  the  11th  Plan  by  merging  different  schemes/subschemes/components of different schemes. A new component known as Market Promotion & Infrastructure for setting up of Marketing Complexes/Khadi Plazas has been added to expand the  marketing  network  of  Khadi  &  VI  products.  Besides,  the  other  component  namely Modified MDA (MMDA) is as follows:-

(i) The existing MDA scheme launched on 01.04.2010, had subsidy @ 20% on 'production value of Khadi to be distributed among producing institutions (30%), selling institutions (45%) and artisans (25%).

(ii)  Under  the  Modified  MDA,  Pricing  would  be  fully  de-linked  from  the  cost  chart  and products can be sold at market-linked prices at all stages of production. Incentives would be extended to  artisans and Karyakartas. Further, production & marketing support for products, which are self-sustainable, will be phased out. Modified MDA shall be calculated at 30% of the Prime Cost, cost of raw material plus conversion charges up to grey cloth  plus processing charges  without  margins  [establishment  expenditure  (25%)  and  trading,  insurance  &  bank interest  (8%)]).  The  Modified  MDA  shall  be  distributed  amongst  producing  institutions (40%), selling institutions (20%) Jand artisans (40%).

## Interest Subsidy Eligibility Certificate Scheme (ISEC)

Under the Scheme funds are mobilised from banking institutions for filling the gap between the  actual  fund  requirements  and  availability  of  funds  from  budgetary  sources  by  khadi institutions and credit is made available to Khadi Institutions at a concessional rate of interest of 4 % per annum for working capital as per their requirement.

## Workshed Scheme for Khadi Artisans

Financial  assistance  is  provided  under  the  Scheme  for  construction  of  worksheds  to  khadi artisans  belonging to  BPL category through the khadi institutions  in order to  facilitate  and empower  khadi  spinners  and  weavers  to  chart  out  a  sustainable  path  for  growth,  income generation and better work environment and to enable them to carry out their spinning and weaving work effectively.

## Strengthening  infrastructure  of  existing  weak  Khadi  institutions  and  assistance  for marketing infrastructure

The  scheme  of  Strengthening  Infrastructure  of  Existing  Weak  Khadi  Institutions  and Assistance for Marketing Infrastructure has been formulated for extending financial assistance to existing weak Khadi institutions for strengthening of their infrastructure and for renovation of selected khadi sales outlets.  The objective of the scheme is to provide needbased support towards the Khadi sector for nursing the sick/problematic institutions whose production,  sales  and  employment  have  been  declining  while  they  have  potential  to  attain normalcy and to support creation of marketing infrastructure in identified outlets.

## Annexure