Lok Sabha Question No. 3709 (UNSTARRED), answered on 2018-03-19
Subject: Promotion of Khadi Industries
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: SUNIL KUMAR MONDAL, Adhikari Dibyendu

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 3709 TO BE ANSWERED ON 19.03.2018

## PROMOTION OF KHADI INDUSTRIES

3709.   SHRI SUNIL KUMAR MONDAL: SHRI DIBYENDU ADHIKARI:

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

- (a) the  details  of  the  expenditure  incurred  by  the  Government  for  the  development  of Khadi and Village Industries Commission (KVIC) during each of the last three years and the current year, State-wise;
- (b) whether the Government proposes to tie Khadi industries with retail chains and shopto-shop marketing systems and if so, the details thereof; and
- (c) whether the Government proposes to revive the khadi industries in the country and if so, the details thereof?

## ANSWER

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

- (a): Government  in  the  Ministry  of  Micro,  Small  and  Medium  Enterprises  (MSME) provides funds to Khadi and Village Industries Commission (KVIC) for the development of Khadi and Village Industries in the country.  Details of funds provided to KVIC for the last three years and the current year are as follows:

(Rs. in crore)

| Year         | Funds released to KVIC   |
|--------------|--------------------------|
| 2014-15      | 316.25                   |
| 2015-16      | 239.70                   |
| 2016-17      | 450.13                   |
| 2017-18 (RE) | 1074.21*                 |

* There is a common budget allocation for Plan and Non-Plan from 2017-18 onwards which includes Rs.285.35 crore of GIA salaries, Pension & OAE, etc. During 2017-18 KRDP (ADB Assistance) budget has been enhanced to Rs.372.80 crore in comparison to previous year's allocation of Rs.5 crore.

- (b): Khadi  and  Village  Industries  Commission  (KVIC)  has  entered  into  contract  with popular retail chain stores for setting up of 'Khadi Korner' in the retail chains based on the concept of 'Shop in Shop'. KVIC has entered into an agreement with M/s. GLOBUS,Mumbai ,Apna  Bazar  and  Cotton  Bazar  to  set  up  such  stores.    KVIC  has  also entered into agreement with private sector players like Raymond's, M/s. Aditya Birla Group, etc. for marketing of Khadi in their retail showrooms.

- (c): Ministry of MSME is implementing the following schemes/programmes all over the country through KVIC in order to revive Khadi industries:

## i)   Khadi Grant:

1. Strengthening  Infrastructure of existing Weak Khadi  Institutions and Assistance for Marketing Infrastructure provides for renovation of khadi sales outlets and providing assistance for strengthening infrastructure of existing weak selected institutions
2. Workshed  Scheme  for  Khadi  Artisans  for  providing  assistance  for  construction  of worksheds.
3. ii)  Market  Promotion  Development  Assistance  (MPDA)  -  A  unified  scheme  by  merging Market  Development  Assistance,  Publicity,  Marketing  and  Market  Promotion.    A  new component for Infrastructure namely setting up of Marketing Complexes /Khadi Plazas has been added to expand the marketing network of Khadi & VI products. Under the Modified MDA  (MMDA)  financial  assistance  at  30%  of  the  Prime  Cost,  is  distributed  amongst Producing Institutions (40%), Selling Institutions (20%) and Artisans (40%).
4. iii) Interest Subsidy Eligibility Certificate (ISEC)Scheme provides credit at concessional rate of interest through Banks as per the requirement of the Khadi institutions. The institutions are required to pay interest of only 4%, any interest charged by banks over 4% will be paid by the Government of India through KVIC to the banks.

iv)Khadi  Reform  and  Development  Programme  (KRDP)aims  to  revitalize  the  khadi  sector with enhanced sustainability of khadi, increased incomes and employment for spinners and weavers, increased artisans' welfare and  to achieve synergy with village industries. Under KRDP, restructured amount of US$ 105 million has been negotiated with Asian Development Bank  (ADB)  and  funds  are  being  provided  to  the  Government  of  India  to  be  released  to KVIC as 'grants-in-aid' under budgetary allocation through the Ministry of MSME. Khadi Reform Package envisages reform support in the following areas: (i) Artisan Earnings and Empowerment, (i)Direct Reform Assistance to 400 Khadi Institutions & (iii) Implementation of a well-knit MIS.

- v)  Strengthening  infrastructure  of  weak  Khadi  institutions  and  assistance  for  marketing infrastructure:    This  scheme  provides  need-based  support  towards  the  Khadi  sector  for nursing the  sick/problematic  institutionsfor  elevation  from  'D'  to  'C'  category  as  well  as those  whose  production,  sales  and  employment  have  been  declining.  Under  this  scheme, financial assistance is provided to existing weak Khadi Institutions for strengthening of their infrastructure and for renovation of khadi sales outlets.

vi)  Scheme  of  Fund for Regeneration of Traditional Industries (SFURTI)  is being implemented  from  2005-06  for  making  Khadi,  Village  Industries  &  Coir  Traditional Industries more productive and competitive by organizing these Industries and artisans into clusters. The Scheme  envisages providing need-based assistance for replacement of production equipment, setting up  of  common  facility  centres  (CFC),  product  development, quality improvement, improved marketing, training and capacity building, etc.

In addition to this, following initiatives have been taken to enhance the production and sales of KVI products.

- i) Liberal  policy  has  been  adopted  to  fix  the  target  of  production  and  sales  of  Khadi Institutions.
2. ii) KVIC has been catering to the need of Government Departments and bulk buyers such as,  Defence,  Health  &Family  Welfare  Departments,  Paramilitary  Forces  and  other Ministries  of  Central  &  State  Government  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.
3. iii) One  of  the  key  interventions  under  reform  programme  is  the  development  and implementation of the Khadi Mark. The Khadi Mark was launched by the President of India in September  2013  subsequent  to notification of the Khadi  Certification Regulations  2013.  The  Khadi  Mark  not  only  guarantees  the  genuineness  of  Khadi products  but  also  promote  Khadi  as  a  brand  that  connotes  social,  cultural,  and environmental values.

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