Lok Sabha Question No. 1275 (UNSTARRED), answered on 2023-07-27
Subject: Impact of Price Rise on Khadi Production
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Beesetti  Venkata Satyavathi, Reddeppa Nallakonda Gari

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 1275 TO BE ANSWERED ON 27.07.2023

## IMPACT OF PRICE RISE ON KHADI PRODUCTION

1275. DR. BEESETTI VENKATA SATYAVATHI: SHRI N. REDDEPPA:

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

- (a) whether  the  Government  is  aware  that  the  recent  price  rise  in  cotton  and  sliver  has negatively impacted khadi production in the country;
- (b) if so, the measures taken by the Government to ensure decreased price of raw material;
- (c) whether the Government proposes to remove the current five per cent GST applied on the cotton sliver from which the yarn for khadi fabric is derived as khadi products are exempted from GST as being demanded;
- (d) whether it is true that many Khadi kendras have been shut down due to low production levels which is resulting in unemployment; and
- (e) if  so,  the  steps  taken/being  taken  by  the  Government  to  strengthen  Khadi  and  Village Industries Commissions?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI BHANU PRATAP SINGH VERMA)

(a)&(b):    Ministry  of  MSME,  through  Khadi  and  Village  Industries  Commission's  (KVIC) Departmental Central Sliver Plants (CSPs), are procuring cotton only from Cotton Corporation of India  (CCI).  KVIC  is  aware  of  increase  of  prices  of  raw  material  (cotton)  from  the  month  of September  2021  onwards.  In  order  to  maintain  cost  of  the  fabric,  thereby  achieving  the  sales target, the difference of price hike of raw material (cotton) and Khadi fabric produced is met from the Price Fluctuation Fund available with Departmental Central Sliver Plants, without revision of sliver/roving cost produced by the plant till 31.03.2022 i.e Rs. 227/Kg.

Further, as the cost of the cotton increased in the market, KVIC has to revise the cost of Sliver/roving w.e.f. 01.04.2022 to Rs. 385/Kg. Thereafter, cost of cotton has substantially reduced and  cost  of  sliver/roving  have  also  been  brought  down  correspondingly  by  about  40%  from 01.04.2023  as  compared  to  01.04.2022  at  Rs.  265/Kg.  Due  to  such  timely  measures  taken  by KVIC, the demand and supply of the raw material to the KIs has been kept unaffected resulting in unhindered production performance by the KIs.

(c): No Sir, no such proposal to exempt the current five per cent GST applied on the cotton sliver is under consideration with the Government.

- (d): No Sir, Khadi Institutions have not been shut down due to low production.
- (e): Government of India, through Khadi and Village Industries Commission, has been taking following steps for strengthening of KVIC:
- i. Promote Khadi Mark and create a niche for Khadi and Village Industries (KVI) products based on quality and sustainability.
- ii. Under  Workshed  Scheme,  financial  assistance  is  provided  upto  Rs.  1,20,000/-  for construction  of  Individual  Workshed  and  Rs.  80,000/-  per  artisan  for  construction  of Group Workshed for improving the working condition of Khadi workers.
- iii. Under  Strengthening  of  Infrastructure  of  Existing  Weak  Khadi  Institutions,  financial assistance  is  provided  upto  Rs.  15.00  lakh  to  KIs  for  capital  expenditure  and  working capital.
- iv. To enhance earning of  the  artisans,  KVIC  has  increased  the  spinning  wages  from  Rs. 7.50/- per hank to Rs. 10.00 per hank w.e.f 01.04.2023.
- v. In order to improve the quality and increase the productivity for reducing the roving cost, Refurbishment/Modernization of the CSPs  in consultation with Textile Research Association has been under taken.

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