Lok Sabha Question No. 313 (STARRED), answered on 2016-08-08
Subject: Promotion of Khadi
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: MAUSAM NOOR

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

## LOK SABHA STARRED QUESTION NO.*313 TO BE ANSWERED ON 08.08.2016

## PROMOTION OF KHADI

## *313. SHRIMATI MAUSAM NOOR:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state: (a) whether adequate steps have been taken/being taken by the Government to promote Khadi  products  and  if  so,  the  details  thereof  along  with  the  schemes/programmes  under implementation;

(b) whether any proposal submitted by the Khadi and Village Industries Commission for introducing Khadi as the first preferred material in schools and other establishments is under the consideration of the Government; and

- (c) if so, the details and the status thereof?

## ANSWER

MINISTER IN THE MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI KALRAJ MISHRA)

(a)to(c): A statement is laid on the table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  THE  LOK  SABHA STARRED QUESTION No.*313   FOR ANSWER ON 08.08.2016

(a): The  following  steps  have  been  taken  by  the  Government  to  promote Khadi products:

- i) A network of more than 7050 sales outlets alongwith 7 Departmental  Khadi  Gramodyog  Bhavans  and  one  Gramshilpa  are  in existence in the country. The Departmental Khadi Gramodyog Bhavans located at Metropolitan & major  cities and other urban areas played an important role creating a link between the rural artisans producing variety of  products  and  the  elite  urban  consumers  living  in  urban  areas  by managing  availability  of  the  exclusive  items  for  consumers  of  all  age group under one roof.
2. ii) The Government, in order to boost export of khadi products, has given  deemed  'Export  Promotion  Council'  status  to  Khadi  and  Village Industries Commission (KVIC) under which KVIC has already enlisted more than 900 exporters. There is a provision of providing incentive in the  form  of  5% FOB value of direct export of khadi products. Besides, KVIC  has  also  been  focusing  on  quality  participation  in  International Exhibitions and Buyer-Seller Meets abroad to tap new/emerging markets for khadi products.
3. iii) Domestic  exhibitions under different levels are organized to support units/ institutions under KVI sector to promote KVI products and also conduct sale.
4. iv) KVIC alongwith representatives of  KVI institutions  and  PMEGP units participate in International exhibitions/Fairs organized by ITPO/FIEO etc. in different countries to exhibit and sell KVI products.
- v) Financial assistance has been provided for the renovation/modernization  of  Sales  Outlets  of  institutions  as  well  as Departmental Sales Outlets (DSOs) of KVIC and State KVIBs under the scheme of 'Assistance for Marketing Infrastructure'.

The  following  schemes/programmes  are  being  implemented  by  KVIC  for development of Khadi:

- (i) Market Development Assistance (MDA) Scheme
- (ii) Interest Subsidy Eligibility Certificate (ISEC) Scheme
- (iii) Workshed Scheme for Khadi Artisans
- (iv) Scheme  for  Strengthening  of  Infrastructure  of  Existing  Weak Khadi Institutions and Assistance for Marketing Infrastructure
- (v) Aam Admi Bima Yojana
- (vi) Artisan Welfare Fund Trust (AWFT)

i)  MDA introduced w.e.f 01.04.2010, a flexible, growth stimulating and artisan  oriented  Market  Development  Assistance  (MDA)  Scheme,  in place of the erstwhile system of Rebate. Under MDA, financial assistance is provided to institutions @ 20% of the value of production of khadi and polyvastra, to be shared among artisans, producing institutions and selling institutions in the ratio 25:30:45. MDA provides institutions a flexibility to  use  the assistance for improving the outlets, products and production processes, besides giving incentive to customers, etc.

ii) ISEC scheme introduced in May 1977 to mobilize funds from banking institutions for filling the gap between the actual fund requirements and availability of funds from budgetary sources. Under the Scheme, credit at the concessional rate on interest is made available as per the requirement of loan of the institutions. The institution is required to pay only 4% and interest charged by banks over 4% will be paid by Central Government through KVIC.

iii)  Workshed Scheme for Khadi Artisans was introduced in 2008-09 for providing financial assistance for construction of worksheds to khadi artisans  belonging  to  BPL  category  through  the  khadi  institutions  with which  the  khadi  artisans  are  associated.  The  maximum  quantum  of assistance  for  individual  workshed  is  Rs.60,000  and  for  the  Group Workshed is Rs.40,000 per capita.

iv) Scheme for Strengthening of Infrastructure of Existing Weak Khadi  Institutions  and  Assistance  for  Marketing  Infrastructure: Under the scheme, financial assistance is provided to existing weak Khadi institutions for strengthening of their infrastructure and for renovation of selected khadi sales outlets. In order to facilitate the need-based support towards  the  Khadi  sector  for  nursing  the  sick/problematic  institutions elevated  from  'D'  to  'C'  category  as  well  as  those  whose  production, sales  and employment have been declining while they have potential to attain  normalcy  and  to  support  creation  of  marketing  infrastructure  in other identified outlets.

v) Aam  Admi  Bima  Yojana  -  KVIC,  in  association  with  Life Insurance  corporation  of  India  (LIC)  implements  a  group  insurance scheme named Aam Admi Bima Yojana (earlier known as Khadi Karigar 'Janshree  Bima  Yojana'  which  was  merged  with    Aam  Admi  Bima Yojana  w.e.f.  1.1.2013)  to  provide  insurance  cover  to  khadi  artisans against normal and accidental death and disability.  The scheme offers an add-on  benefit,  a  scholarship  of  Rs.100  each  per  month  for  upto  two school going children of the insured artisans studying in standard IX to XII  and  in  courses  offered  by  Industrial  Training  Institutes  (ITIs).  The compensation under this scheme has also been increased by 50 per cent which  is  now  ₹30,000/-  in  natural  death,  ₹75,000/-  in  accidental  death and in full permanent  disability due  to accident, ₹37,500  in part permanent disability due to accident.

vi) Artisan Welfare Fund Trusts (AWFTs) is conceptually meant to be  run  on  the  lines  of  a  Provident  Fund.    Membership  of  AWTF  is mandatory for all khadi and polyvastra producing institutions affiliated to KVIC and State KVIBs. All the Institutions categorized as A+, A, B and C are eligible to join the Trust Fund. This Fund has been functioning in 21 States and the concerned State Government manages it.

(b) & (c): No  proposal has been submitted by the Khadi  and  Village Industries  Commission  (KVIC)  for  introducing  Khadi  as  the  first  preferred material in schools and other establishments.  However, KVIC has written to the Ministry  of  HRD  and  State  Governments  Education  Boards,  for  introducing Khadi for School Uniforms. Similarly, Ministry of Health and Family Welfare and State Government Hospitals have been requested to examine the proposal of introduction of Khadi in their respective establishments.

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