Explainer: What does the Government do for Khadi promotion?
Sai Krishna Muthyanolla
October 15, 2019
Khadi was a strong
symbol of the freedom movement. With machine made garments capturing the
market, Khadi lost out. But what does the government do for Khadi promotion or
more specifically what is the role of KVIC?
Khadi, also known as ‘Khadar’, is handwoven cotton cloth with hand spun yarn. Not only does it symbolise India’stextile heritage, Khadi has also been associated with India’s freedom struggleagainst the British. Fearing that Khadi might conquer the textile market inBritain, the colonisers introduced cheap fabrics made with machines in theIndian market. This led to a downfall in the production of Khadi cloth in Indiawhich was the source of livelihood for many. Mahatma Gandhi brought Charkha- atraditional wheel used to spin yarn, into the freedom struggle as a symbol ofself-sufficiency and Swadesh.
Post-Independence, Government of Indiadid stress on developing rural industries. A statutory body, Khadi and Village
Industries Commission (KVIC) was established in 1956 by an Act ofthe Parliament taking over the work of erstwhile All India Khadi and VillageIndustries Board (KVIB). But, what is the role of KVIC? This story focusses onKVIC with focus on Prime Minister’s Employment Generation Programme and itsperformance in the last few years.
KVIC’s
prime objective is to encourage self-employment among the rural population
Established with the objectives ofgenerating employment by promoting the sale of merchandise and by instillingstrong rural community spirit and creating self-reliance among the poor, KVIC is in charge of conductingprograms across rural areas in order to develop Khadi and Village Industries.From sourcing raw materials and equipment required to providing facilities formarketing as well as training artisans and researching in this domain, thesetasks fall under the purview of the commission.
KVIC has implemented programs andschemes such as Prime Minister’s
Employment Generation Programme (PMEGP), KhadiProgramme, Village Industries Programme, Khadi Reform and Development Programme(KRDP), Market Promotion Development Assistance (MPDA) and Scheme of Fund forRegeneration of Traditional Industries (SFURTI) so as to attain its objectives.
Production
and sales of Khadi and Village Industries products are increasing every year
From the above chart, it can beinferred that every year production and
sales of Khadi as well as other products produced inthe Village Industries is increasing. This can also be seen as an increase indemand for Khadi and other traditional village products. The production ofKhadi has increased by 123% in the span of five years while the sales haveincreased by 175% in the same period. Government’s answer in Lok Sabha in July2019 mentioned that Khadi includes Polyvastra &
Solarvastra from 2015-16 onwards. In 2016-17, theproduction and sales of Khadi products shot up by 43% and 42% respectively. Inthe case of other products of
village industries, production has increased by 111% and sales by122% during this 5-year period.
There are reports that the uniforms ofstudents in Kendriya Vidyalaya schools acrossthe country may soon be shifted to Khadi. Even CBSE had written tothe affiliated schools urging them to observe a ‘Khadi-wearing’ day every monthat least.
How many people
are employed in Khadi & Village Industries?
Employment in village industries, whichis one of the prime objectives of KVIC, has witnessed an increasing trend. Thecumulative employment including male and female has been displayed in followingchart. The discrepancy in the number of employees’ in 2016-17 in Khadi industryis because of enabling Aadhaar. Out of the total 18.8 lakh additionalemployment generated in village industries since 2014-15, 33.5% of it was addedin 2018-19. It should be noted that 2018-19 data is provisional and is up to 19June 2019 throughout the story.
PMEGP
was launched in 2008 by MSME after merging the erstwhile schemes
PMEGP is a creditlinked subsidy scheme which encourages people from both rural and urban areasto set up industries to generate employment opportunities in non-farm sector. Theprogramme was launched in 2008 by the Ministry of Micro, Small and Medium Enterprises after merging theformer schemes, the Prime Minister’s Rojgar Yojana (PMRY) and Rural EmploymentGeneration Programme (REGP). Subsidy ranging from 15% to 35% of the projectcost is given based on the category and area to which the beneficiaries belong.Special category consists of Women, SC, ST, Physically Handicapped, minorities,Ex- servicemen and other beneficiaries. The maximum project cost should notexceed Rs. 25 lakhs for manufacturing sector and Rs. 10 lakhs for the servicesector to be eligible to avail the benefits of the scheme.
KVIC is the single nodal agencyresponsible for implementing the programme at the national level. At the statelevel, KVIBs, KVIC Directorates and District Industries Centres are theimplementing agencies. Annually, the funds for implementation of PMEGP arereleased by the Union Government in lump sum to KVIC. No allocation of fund isdone state-wise. Funds allocated for PMEGP forms a large portion of the totalfund allocated to all schemes being implemented by KVIC. In 2018-19, Rs. 1968.8crores had been allocated.
2018-19
data suggests that 5.87 lakh employment opportunities were generated in that
period under PMEGP
Data provided by MSME Ministry onemployment generation and number of projects which have beenundertaken with the aid of PMEGP is represented in the following chart. Ageneral trend is not visible. The year 2018-19 has witnessed exceptionalincrease in employment generation and number of projects as compared to the previousyears. This could be primarily on account of a larger fund release in anelection year. A total of 73,427 units have been set up generating 5.87 lakhsemployment opportunities in 2018-19. It has to be noted that all this data isself-reported by these units and is not cross-verified.
Jammu
and Kashmir had the largest number of units set up in 2018-19
The maximum number of units, set up in2018-19, around 7529 units, were in the then state of Jammu and Kashmirgenerating an estimated employment of 60,232. Following J&K are the statesof Maharashtra (including Dadra and Nagar Haveli), Tamil Nadu and Uttar Pradeshreported more than 5000 units each and employment to more than 40,000 people ineach of these states.
PMEGP
can be clubbed with other schemes such as MUDRA
Subsidy is now paid directly into thebeneficiary’s account through Direct Benefit Transfer (DBT) under PMEGP. Theentire process from application to transfer of subsidy to account has beendigitalised since 01 July 2016. This has helped in making the systemtransparent and reduced the interference of middlemen as per government’sresponse in the Lok Sabha.
PMEGP is different from Pradhan Mantri Mudra Yojana. Under PMMY, nosubsidy is given for the loan unless the loan proposal is linked to anothergovernment scheme such as PMEGP, in which case, the proposal will be eligibleunder both. Mudra scheme extendsrefinance support to banks, micro finance institutions, NBFCs and others whichare involved in lending money for income generating activities in non-farmsector.
Conducting exhibitions, signing MoUswith corporates, introducing ‘Khadi Mark’ on products, supplying Khadi togovernment departments and PSUs, capturing international market and opening newoutlets are some other initiatives taken by KVIC to promote the use of Khadiand boost its market.
This year, which marks the 150 birth anniversary of Mahatma Gandhi, will hopefully continue to spur the growth of Khadi.
Featured Image: Khadi promotion by the government