Khadi Development and Village Industries Commission
Encyclopedia
The Khadi and Village Industries Commission (KVIC) is a statutory body
formed by the Government of India
, under the Act of Parliament, 'Khadi and Village Industries Commission Act of 1956'. It is an apex organization under Ministry of Micro, Small and Medium Enterprises
(Govt. of India), with regard to khadi
and village industries within India, which seeks to - "plan, promote, facilitate, organise and assist in the establishment and development of khadi and village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary.". In April 1957, it took over the work of former All India Khadi and Village Industries Board.
Its head office is based in Mumbai
, with its six zonal offices in Delhi
, Bhopal, Bangalore
, Kolkata
, Mumbai
and Guwahati
. Other than its zonal offices, it has offices in 29 states for the implementation of its various programs.
Khadi
, refers to handspun and hand-woven cloth. The raw materials may be cotton, silk, or wool, which are spun into threads on a Charkha (A traditional spinning implement).
Khadi was launched in 1920 as a political weapon in the Swadeshi movement
of Mahatma Gandhi
.
Khadi is sourced from different parts of India
, depending upon its raw materials - While the silk variety is sourced from West Bengal
, Bihar
, Orissa
and North Eastern states, the cotton variety comes from Andhra Pradesh
, Uttar Pradesh
, Bihar
and West Bengal
. Khadi poly is spun in Gujarat and Rajasthan
while Haryana
, Himachal Pradesh
and Jammu and Kashmir
are known for the woolen variety.
area, where the Fixed Capital Investment per Artisan
(weaver) does not exceed Rupees One Lakh
The Fixed Capital Investment can be changed by the Central Government of India
whenever it so requires.
of almost all processes, Khadi and Village industries are suited like no other to a labor surplus country like India
.
Another advantage of Khadi and Village Industries is that they require little or no capital to set up, thereby making them an economically viable option for the rural poor. This is an important point with reference to India in view of its stark income, regional and rural/urban inequalities.
The commission seeks to achieve these objectives by implementing and monitoring various schemes and programs.
which is the administrative head of the programs. The Ministry receives funds from the Central Government of India, and routes these to the Khadi and Village Industries Commission for the implementation of programs and schemes related to Khadi and Village Industries.
The Khadi and Village Industries Commission then uses these funds to implement its programs either directly - Through its 29 state offices, by directly funding Khadi and Village institutions and co-operatives, or indirectly through 33 Khadi and Village Industries Boards, which are statutory bodies formed by the state governments within India, set up for the purpose of promoting Khadi and Village Industries in their respective states. The Khadi and Village Industries Boards, in turn, fund Khadi and Village Institutions/Co-operatives/Entrepreneurs.
At present the developmental programmes of the commission are executed through, 5600 registered institutions, 30,138 Cooperative
societies and about 94.85 lakh people.
Under the scheme, the beneficiary is required to invest his/her own contribution of 10 per cent of the project cost. In case of Schedule Castes/Schedule Tribes and beneficiaries from other weaker sections, the beneficiary’s contribution is 5 per cent of the project cost.
The remaining 90 and 95% as of the project cost, as the case may be, is granted by banks specified under the scheme.
The Beneficiaries under the scheme are refunded a certain amount of the loan (25% for General, 35% for weaker sections in rural areas) which is credited after two years from the date that the loan was extended.
Under this scheme, loans are provided by the banks to the members to meet their working/fixed capital requirements. These loans are provided at a concessional interest rate of 4% p.a. The difference between the actual interest rate and the concessional rate is borne by the commission under the 'grants' head of its budget. However, only members producing Khadi or Polyvastra (a type of Khadi) are eligible for this scheme.
The rebate is allowed only on the sales made by the institutions/centers run by the Commission/State Boards and also at the sales centers run by the registered institutions which are engaged in the production of Khadi and polyvastra.
Recently, the finance ministry has asked the micro, small and medium enterprises ministry to redraw its rebate scheme for Khadi and village industries. Its view is that the “ministry should approach the plan commission and not seek year-to-year extension of the scheme. Furthermore, it has asked the MSME ministry to redesign the scheme in a manner that it should benefit the artisan and not the seller, which (has been) the case so far” With regard to this, A proposal received from the Commission for introducing Market Development Assistance as a possible alternative to Rebate on Sale is being considered by the Government.
Funds are provided mainly by a way of Grants and Loans.
Fixed Capital expenditure further consists of expenditure on -
a) Machinery.....100000
b) Implements....50000
c) Work sheds....25000
d) Sales Outlets etc.25000
In total, there are 15431 sales outlets, out of which 7,050 are owned by the commission. These are spread all over India.
The products are also sold internationally through exhibitions arranged by the commission.
Statutory Corporation
A statutory corporation or public body is a corporation created by statute. While artificial legal personality is almost always the result of statutory intervention, a statutory corporation does not include corporations owned by shareholders whose legal personality derives from being registered...
formed by the Government of India
Government of India
The Government of India, officially known as the Union Government, and also known as the Central Government, was established by the Constitution of India, and is the governing authority of the union of 28 states and seven union territories, collectively called the Republic of India...
, under the Act of Parliament, 'Khadi and Village Industries Commission Act of 1956'. It is an apex organization under Ministry of Micro, Small and Medium Enterprises
Ministry of Micro, Small and Medium Enterprises
The Ministry of Micro, Small and Medium Enterprises , a branch of the Government of India, is the apex body for formulation and administration of the rules and regulations and laws relating to Micro, Small and Medium Enterprises in India...
(Govt. of India), with regard to khadi
Khadi
The term khādī or khaddar means cotton. khādī is Indian handspun and hand-woven cloth. The raw materials may be cotton, silk, or wool, which are spun into threads on a spinning wheel called a charkha. It is a versatile fabric, cool in the summer and warm in the winter...
and village industries within India, which seeks to - "plan, promote, facilitate, organise and assist in the establishment and development of khadi and village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary.". In April 1957, it took over the work of former All India Khadi and Village Industries Board.
Its head office is based in Mumbai
Mumbai
Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...
, with its six zonal offices in Delhi
Delhi
Delhi , officially National Capital Territory of Delhi , is the largest metropolis by area and the second-largest by population in India, next to Mumbai. It is the eighth largest metropolis in the world by population with 16,753,265 inhabitants in the Territory at the 2011 Census...
, Bhopal, Bangalore
Bangalore
Bengaluru , formerly called Bengaluru is the capital of the Indian state of Karnataka. Bangalore is nicknamed the Garden City and was once called a pensioner's paradise. Located on the Deccan Plateau in the south-eastern part of Karnataka, Bangalore is India's third most populous city and...
, Kolkata
Kolkata
Kolkata , formerly known as Calcutta, is the capital of the Indian state of West Bengal. Located on the east bank of the Hooghly River, it was the commercial capital of East India...
, Mumbai
Mumbai
Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...
and Guwahati
Guwahati
Guwahati, Pragjyotishpura in ancient Assam formerly known as Gauhati is a metropolis,the largest city of Assam in India and ancient urban area in North East India, with a population of 963,429. It is also the largest metropolitan area in north-eastern India...
. Other than its zonal offices, it has offices in 29 states for the implementation of its various programs.
Khadi
"The livery of freedom" – Mahatma GandhiMahatma Gandhi
Mohandas Karamchand Gandhi , pronounced . 2 October 1869 – 30 January 1948) was the pre-eminent political and ideological leader of India during the Indian independence movement...
Khadi
Khadi
The term khādī or khaddar means cotton. khādī is Indian handspun and hand-woven cloth. The raw materials may be cotton, silk, or wool, which are spun into threads on a spinning wheel called a charkha. It is a versatile fabric, cool in the summer and warm in the winter...
, refers to handspun and hand-woven cloth. The raw materials may be cotton, silk, or wool, which are spun into threads on a Charkha (A traditional spinning implement).
Khadi was launched in 1920 as a political weapon in the Swadeshi movement
Swadeshi movement
The Swadeshi movement, part of the Indian independence movement, was an economic strategy aimed at removing the British Empire from power and improving economic conditions in India by following the principles of swadeshi , which had some success...
of Mahatma Gandhi
Mahatma Gandhi
Mohandas Karamchand Gandhi , pronounced . 2 October 1869 – 30 January 1948) was the pre-eminent political and ideological leader of India during the Indian independence movement...
.
Khadi is sourced from different parts of India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
, depending upon its raw materials - While the silk variety is sourced from West Bengal
West Bengal
West Bengal is a state in the eastern region of India and is the nation's fourth-most populous. It is also the seventh-most populous sub-national entity in the world, with over 91 million inhabitants. A major agricultural producer, West Bengal is the sixth-largest contributor to India's GDP...
, Bihar
Bihar
Bihar is a state in eastern India. It is the 12th largest state in terms of geographical size at and 3rd largest by population. Almost 58% of Biharis are below the age of 25, which is the highest proportion in India....
, Orissa
Orissa
Orissa , officially Odisha since Nov 2011, is a state of India, located on the east coast of India, by the Bay of Bengal. It is the modern name of the ancient nation of Kalinga, which was invaded by the Maurya Emperor Ashoka in 261 BC. The modern state of Orissa was established on 1 April...
and North Eastern states, the cotton variety comes from Andhra Pradesh
Andhra Pradesh
Andhra Pradesh , is one of the 28 states of India, situated on the southeastern coast of India. It is India's fourth largest state by area and fifth largest by population. Its capital and largest city by population is Hyderabad.The total GDP of Andhra Pradesh is $100 billion and is ranked third...
, Uttar Pradesh
Uttar Pradesh
Uttar Pradesh abbreviation U.P. , is a state located in the northern part of India. With a population of over 200 million people, it is India's most populous state, as well as the world's most populous sub-national entity...
, Bihar
Bihar
Bihar is a state in eastern India. It is the 12th largest state in terms of geographical size at and 3rd largest by population. Almost 58% of Biharis are below the age of 25, which is the highest proportion in India....
and West Bengal
West Bengal
West Bengal is a state in the eastern region of India and is the nation's fourth-most populous. It is also the seventh-most populous sub-national entity in the world, with over 91 million inhabitants. A major agricultural producer, West Bengal is the sixth-largest contributor to India's GDP...
. Khadi poly is spun in Gujarat and Rajasthan
Rajasthan
Rājasthān the land of Rajasthanis, , is the largest state of the Republic of India by area. It is located in the northwest of India. It encompasses most of the area of the large, inhospitable Great Indian Desert , which has an edge paralleling the Sutlej-Indus river valley along its border with...
while Haryana
Haryana
Haryana is a state in India. Historically, it has been a part of the Kuru region in North India. The name Haryana is found mentioned in the 12th century AD by the apabhramsha writer Vibudh Shridhar . It is bordered by Punjab and Himachal Pradesh to the north, and by Rajasthan to the west and south...
, Himachal Pradesh
Himachal Pradesh
Himachal Pradesh is a state in Northern India. It is spread over , and is bordered by the Indian states of Jammu and Kashmir on the north, Punjab on the west and south-west, Haryana and Uttar Pradesh on the south, Uttarakhand on the south-east and by the Tibet Autonomous Region on the east...
and Jammu and Kashmir
Jammu and Kashmir
Jammu and Kashmir is the northernmost state of India. It is situated mostly in the Himalayan mountains. Jammu and Kashmir shares a border with the states of Himachal Pradesh and Punjab to the south and internationally with the People's Republic of China to the north and east and the...
are known for the woolen variety.
Village Industry
Any Industry that is located within a ruralRural
Rural areas or the country or countryside are areas that are not urbanized, though when large areas are described, country towns and smaller cities will be included. They have a low population density, and typically much of the land is devoted to agriculture...
area, where the Fixed Capital Investment per Artisan
Artisan
An artisan is a skilled manual worker who makes items that may be functional or strictly decorative, including furniture, clothing, jewellery, household items, and tools...
(weaver) does not exceed Rupees One Lakh
Lakh
A lakh is a unit in the Indian numbering system equal to one hundred thousand . It is widely used both in official and other contexts in Pakistan, Bangladesh, India, Maldives, Nepal, Sri Lanka, Myanmar and is often used in Indian English.-Usage:...
The Fixed Capital Investment can be changed by the Central Government of India
Government of India
The Government of India, officially known as the Union Government, and also known as the Central Government, was established by the Constitution of India, and is the governing authority of the union of 28 states and seven union territories, collectively called the Republic of India...
whenever it so requires.
Relevance of Khadi and Village Industries
The common characteristic found in both - Khadi and Village Industries is that they are labor intensive in nature. In the wake of industrialization, and the mechanizationMechanization
Mechanization or mechanisation is providing human operators with machinery that assists them with the muscular requirements of work or displaces muscular work. In some fields, mechanization includes the use of hand tools...
of almost all processes, Khadi and Village industries are suited like no other to a labor surplus country like India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
.
Another advantage of Khadi and Village Industries is that they require little or no capital to set up, thereby making them an economically viable option for the rural poor. This is an important point with reference to India in view of its stark income, regional and rural/urban inequalities.
Objectives of the Commission
The Commission has three main objectives which guide its functioning. These are -- The Social Objective - Providing employment in rural areas
- The Economic Objective - Providing salable articles
- The Wider Objective - Creating self-reliance amongst people and building up a strong rural community spirit.
The commission seeks to achieve these objectives by implementing and monitoring various schemes and programs.
Implementation of Schemes and Programs
The process of Implementation of schemes and programs starts at the Ministry of Micro, Small and Medium EnterprisesMinistry of Micro, Small and Medium Enterprises
The Ministry of Micro, Small and Medium Enterprises , a branch of the Government of India, is the apex body for formulation and administration of the rules and regulations and laws relating to Micro, Small and Medium Enterprises in India...
which is the administrative head of the programs. The Ministry receives funds from the Central Government of India, and routes these to the Khadi and Village Industries Commission for the implementation of programs and schemes related to Khadi and Village Industries.
The Khadi and Village Industries Commission then uses these funds to implement its programs either directly - Through its 29 state offices, by directly funding Khadi and Village institutions and co-operatives, or indirectly through 33 Khadi and Village Industries Boards, which are statutory bodies formed by the state governments within India, set up for the purpose of promoting Khadi and Village Industries in their respective states. The Khadi and Village Industries Boards, in turn, fund Khadi and Village Institutions/Co-operatives/Entrepreneurs.
At present the developmental programmes of the commission are executed through, 5600 registered institutions, 30,138 Cooperative
Cooperative
A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...
societies and about 94.85 lakh people.
Prime Ministers Employment Generation Program (PMEGP)
The Prime Minister’s Employment Generation Programme (PMEGP) is the result of the merger of two schemes - Prime Minister’s Rojgar Yojana (PMRY) and The Rural Employment Generation Programme (REGP)Under the scheme, the beneficiary is required to invest his/her own contribution of 10 per cent of the project cost. In case of Schedule Castes/Schedule Tribes and beneficiaries from other weaker sections, the beneficiary’s contribution is 5 per cent of the project cost.
The remaining 90 and 95% as of the project cost, as the case may be, is granted by banks specified under the scheme.
The Beneficiaries under the scheme are refunded a certain amount of the loan (25% for General, 35% for weaker sections in rural areas) which is credited after two years from the date that the loan was extended.
Interest Subsidy Eligibility Certification Scheme (ISEC)
The Interest Subsidy Eligibility Certificate (ISEC) Scheme is the major source of funding for the Khadi programme. It was introduced in May 1977 to mobilise funds from banking institutions to fill the gap in the actual fund requirement and its availability from budgetary sources.Under this scheme, loans are provided by the banks to the members to meet their working/fixed capital requirements. These loans are provided at a concessional interest rate of 4% p.a. The difference between the actual interest rate and the concessional rate is borne by the commission under the 'grants' head of its budget. However, only members producing Khadi or Polyvastra (a type of Khadi) are eligible for this scheme.
Rebate Scheme
The rebate on sales of Khadi and Khadi products is made available by the Government so as to make the price of Khadi and Khadi products competitive with other textiles. Normal rebate (10 per cent) all through the year and an additional special rebate (10 per cent) for 108 days in a year, is given to the customers.The rebate is allowed only on the sales made by the institutions/centers run by the Commission/State Boards and also at the sales centers run by the registered institutions which are engaged in the production of Khadi and polyvastra.
Recently, the finance ministry has asked the micro, small and medium enterprises ministry to redraw its rebate scheme for Khadi and village industries. Its view is that the “ministry should approach the plan commission and not seek year-to-year extension of the scheme. Furthermore, it has asked the MSME ministry to redesign the scheme in a manner that it should benefit the artisan and not the seller, which (has been) the case so far” With regard to this, A proposal received from the Commission for introducing Market Development Assistance as a possible alternative to Rebate on Sale is being considered by the Government.
Budgetary Support to the Commission
The Union Government through the Ministry of Micro, Small and Medium Enterprises, provides funds to the Commission under two heads: Plan and Non – Plan. The funds provided under the ‘Plan’ Head are allocated by the commission to its implementing agencies. The funds provided under the ‘Non – Plan’ head are mainly for the Commission’s administrative expenditure.Funds are provided mainly by a way of Grants and Loans.
Grants
A major part of the Khadi grant is being utilised for the payment of sales rebate, which is considered a promotional expenditure. Other expenditures under this head are: Training, Publicity, Marketing, Interest Subsidy on bank loans under ISEC schemeLoans
Expenditures under this head include: Working Capital Expenditure and Fixed Capital Expenditure.Fixed Capital expenditure further consists of expenditure on -
a) Machinery.....100000
b) Implements....50000
c) Work sheds....25000
d) Sales Outlets etc.25000
Sales of Khadi and Village Industry Products
The products produced by the institutions are either sold by them directly, through retailers, wholesalers, or indirectly, through "Khadi Bhandars" (Khadi sales outlets owned by the government)In total, there are 15431 sales outlets, out of which 7,050 are owned by the commission. These are spread all over India.
The products are also sold internationally through exhibitions arranged by the commission.