Lok Sabha Question No. 4320 (UNSTARRED), answered on 2019-07-18
Subject: Scheme to Achieve Aims and Objectives of KVIC
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Pankaj Chowdhary

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTIONNO. 4320 TO BE ANSWERED ON 18.07.2019

## SCHEME TO ACHIEVE AIMS AND OBJECTIVES OF KVIC

## 4320.      SHRI PANKAJ CHAUDHARY:

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

- (a) whether  the  Government  proposes  to  formulate  a  concrete  scheme  to  achieve  aims  and objectives of the Khadi and Village Industries Commission (KVIC) and if so, the details thereof;
- (b) the details regarding the Market Development Assistance being implemented for the KVIC along with the salient features thereof;
- (c) whether it is a fact that clothes and other products of Khadi are very costly;
- (d) if  so,  the  reasons  therefor  and  the  corrective  measures  likely  to  be  taken  by  the Government in this regard; and
- (e) whether the Government proposes to review the activities of KVIC with a view to make it more result-oriented and if so, the details thereof?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NITIN GADKARI)

- (a): No, Sir.  The main objective of Khadi and Village Industries Commission (KVIC) is to promote Khadi and generate employment opportunities in the rural areas of the country. During 2018-19,  146.99  lakh  persons  have  been  engaged  in  the  Khadi  and  Village  Industries  in  the country.  Thus,  the  KVIC  is  achieving  its  objectives  of  promotion  of  Khadi  and  creation  of employment successfully through the implementation of the following programmes and schemes:
- 1)  Prime  Minister's  Employment  Generation  Programme  (PMEGP)  is  a  credit  linked  subsidy scheme, for setting up of new micro-enterprises and to generate employment opportunities in rural as  well  as  urban  areas  of  the  country  through  KVIC,  State  Khadi  &  Village  Industries  Board (KVIBs)  and  District  Industries  Centres  (DICs).    General  category  beneficiaries  can  avail  of margin  money  subsidy  of  25%  of  the  project  cost  in  rural  areas  and  15%  in  urban  areas.  For beneficiaries belonging to special categories such as SC/ST/Women/PH/Minorities/ExServicemen/NER, the margin money subsidy is 35% in rural areas and 25% in urban areas. The maximum cost of projects is Rs.25 lakh in the manufacturing sector and Rs.10 lakh in the service sector.
- 2)  Khadi  Programme:  For  the  development  and  promotion  of  Khadi  Programme,  KVIC implements  following  Schemes  with  the  support  of  34  State/UT  Khadi  and  Village  Industries Boards (KVIBs) and 2632 Khadi Institutions:
- i) Market Promotion and Development Assistance (MPDA).
- ii) Interest Subsidy Eligibility Certificate (ISEC)
- iii) Aam Admi BimaYojana (erstwhile Jana Shree BimaYojana)
- iv) Artisans Welfare Fund Trust (AWFT)
- v) Workshed Scheme for Khadi Artisans
- vi) Strengthening of Infrastructure of Existing Weak Khadi Institutions and Assistance for Marketing Infrastructure.

3)  Village  Industries  Programme  is  broadly  classified  under  seven  groups  for  the  purpose  of implementation of its programmes, which are as under:

- i) Agro Based and Food Processing Industry (ABFPI)
2. ii) Forest Based Industry (FBI)
3. iii) Hand Made Paper and Fibre Industry (HMPFI)
4. iv) Mineral Based Industry (MBI)
- v) Polymer and Chemical Based Industry (PCBI)
6. vi) Rural Engineering and Bio-Technology Industry (REBT)
7. vii) Service & Textile Industry

4) 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.  'Khadi  Reform Package' envisages reform support in the following areas: (i) Artisan Earnings and Empowerment, (ii) Direct Reform Assistance to 400 Khadi Institutions & (iii) Implementation of a well-knit MIS.

5)  Scheme  of  Fund  for  Regeneration  of  Traditional  Industries  (SFURTI)  has  been  under implementation since 2005-06 for making Traditional Industries more productive and competitive by  organizing  the  Traditional  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.  The scheme was modified as revamped SFURTI scheme during 201617.

6)  Capacity  Building  (CB):  KVIC  conducts  training  programmes  through  40  departmental  and non-departmental  training  centres.  These  training  centres  imparts  need-based  training  under various disciplines viz. Soap and Detergent making, Food Items, Bakery Products, Ready Made Garments, Beekeeping, Agaratti making, candle making, motor winding etc.

7)  Science  &  Technology:  Research  and  Development  (R&D)  is  a  vital  input  for  stepping  up productivity  by  bringing  improvement  in  equipment  and  manufacturing  techniques  of  the craftsman.  KVIC continued to increase the productivity  and earnings of artisans and make the production  process  more  artisan-friendly  by  reducing  drudgery  in  their  work.  Various  advance technologies have been developed under Research & Development schemes of KVIC, which bring a significant difference in the quality, productivity and packaging of the products manufactured by the rural industries sector.

In  addition  to  above,  KVIC  is  also  implementing  following  programmes  for  promotion  and development of traditional industries viz. Beekeeping (Honey Mission) and Pottery Development Programme (Kumhar Sashaktikaran Programme):

i)  Bee-Keeping  (Honey  Mission):  KVIC  launched  Honey  (Bee)  Mission  in  July,  2017  for promoting  Beekeeping  and  generating  employment  in  the  beekeeping  potential  States  of  the country.

ii)  Pottery Programme (Kumhar Sashaktikaran): Under this programme KVIC identify the areas where clusters of traditional pottery workers are available and provide them training and electric pottery wheels and other tools like blunger, Pug Mill, etc.

iii)  Mission  Solar  Charkha:  Ministry  of  MSME  has  launched  the  Mission  Solar  Charkha  for implementation of 50 Solar Charkha Clusters across the country with a budget of Rs. 550 crore for the year 2018-19 and 2019-20. The scheme is envisaged to generate direct employment to nearly one lakh persons. Solar Charkha Units have been classified as Village Industries.

During  the  last  two  years,  KVIC  has  generated  additional  employment  opportunities  of 10.58 lakh persons under Khadi and Village Industries in the country which is as follows:

(Employment in lakh persons)

| Year                  |   Cumulative Employment |   New Employment |
|-----------------------|-------------------------|------------------|
| 2017-18               |                  140.36 |             3.96 |
| 2018-19 (provisional) |                  146.98 |             6.62 |

The production and sale of Khadi products during the last two years and the current year is as follows:

(Rs. in crore)

| Particular          |   2017-18 |   2018-19 (Provisional) |   2019-20 (as on 31.5.2019) |
|---------------------|-----------|-------------------------|-----------------------------|
| Production of Khadi |   1626.66 |                 1963.3  |                      269.95 |
| Sales of Khadi      |   2510.21 |                 3215.13 |                      390.63 |

(b): Market Promotion Development Assistance (MPDA)is formulated as a unified scheme by merging Market Development Assistance (MDA), 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  &  Village  Industries  (KVI)  products. Under the Modified MDA (MMDA) financial assistance at 30% of the Prime Cost is distributed amongst Producing Institutions (20%), Selling Institutions (10%), Artisans (40%),the remaining amount (30%) is to be given to best performing Khadi Institutions selected through a transparent scorecard. Aims of MPDA are as follows:

- i) Rationalization of financial assistance and gradual withdrawal of subsidy.
2. ii) Market segmentation of KVI products for effective pricing.
3. iii) Strengthening of marketing network and opportunities in domestic and international market to Khadi and V.I. Units by organizing and participating in exhibitions.
4. iv) Provide publicity of schemes, quality products of KVI sector & creation of demand pool.
- v) Incentives to be given to khadi karigars, other artisans and Karyakartas.
6. vi) Infrastructure development by setting up of Khadi Plaza.

## (c): No Sir.

'Khadi' is a traditional fabric made out of handspun and hand-woven yarn in India from cotton, woolen and silk or from a mixture of any two or all of such yarn and is different from mill cloth. The Village Industries products including handicrafts are being produced by the entrepreneurs are mostly with the local raw-material resources and these products are unique in nature.

Khadi Institutions having 'Khadi Mark' are authorized to produce Khadi. If we compare 'Khadi Mark' garments with other Local Brand garments, it is cheaper than branded mill made garments. Khadi Institutions promoted by the KVIC have core competence in manufacturing of high count unique muslin and silk Khadi, and because of their unique quality these products may be costlier than some mill made garments.

## (d): Does not arise.

(e): Yes  Sir,  Ministry  of  MSME  periodically  reviews  the  progress  of  Khadi  &  Village Industries Schemes at District level, State level and National level.