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 hand
woven cotton cloth with hand spun yarn. Not only does it symbolise India’s
textile heritage, Khadi has also been associated with India’s freedom struggle
against the British. Fearing that Khadi might conquer the textile market in
Britain, the colonisers introduced cheap fabrics made with machines in the
Indian market. This led to a downfall in the production of Khadi cloth in India
which was the source of livelihood for many. Mahatma Gandhi brought Charkha- a
traditional wheel used to spin yarn, into the freedom struggle as a symbol of
self-sufficiency and Swadesh.  

Post-Independence, Government of India
did stress on developing rural industries. A statutory body, Khadi and Village
Industries Commission
(KVIC) was established in 1956 by an Act of
the Parliament taking over the work of erstwhile All India Khadi and Village
Industries Board (KVIB). But, what is the role of KVIC? This story focusses on
KVIC with focus on Prime Minister’s Employment Generation Programme and its
performance in the last few years.

KVIC’s
prime objective is to encourage self-employment among the rural population

Established with the objectives of
generating employment by promoting the sale of merchandise and by instilling
strong rural community spirit and creating self-reliance among the poor, KVIC is in charge of conducting
programs across rural areas in order to develop Khadi and Village Industries.
From sourcing raw materials and equipment required to providing facilities for
marketing as well as training artisans and researching in this domain, these
tasks fall under the purview of the commission.

KVIC has implemented programs and
schemes such as Prime Minister’s
Employment Generation Programme
(PMEGP), Khadi
Programme, Village Industries Programme, Khadi Reform and Development Programme
(KRDP), Market Promotion Development Assistance (MPDA) and Scheme of Fund for
Regeneration of Traditional Industries (SFURTI) so as to attain its objectives.

Production
and sales of Khadi and Village Industries products are increasing every year

Khadi promotion_Production and sale

From the above chart, it can be
inferred that every year production and
sales
of Khadi as well as other products produced in
the Village Industries is increasing. This can also be seen as an increase in
demand for Khadi and other traditional village products. The production of
Khadi has increased by 123% in the span of five years while the sales have
increased by 175% in the same period. Government’s answer in Lok Sabha in July
2019 mentioned that Khadi includes Polyvastra &
Solarvastra
from 2015-16 onwards. In 2016-17, the
production and sales of Khadi products shot up by 43% and 42% respectively. In
the case of other products of
village industries
, production has increased by 111% and sales by
122% during this 5-year period.

There are reports that the uniforms of
students in Kendriya Vidyalaya schools across
the country may soon be shifted to Khadi. Even CBSE had written to
the affiliated schools urging them to observe a ‘Khadi-wearing’ day every month
at least. 

How many people
are employed in Khadi & Village Industries?

Employment in village industries, which
is one of the prime objectives of KVIC, has witnessed an increasing trend. The
cumulative employment including male and female has been displayed in following
chart. The discrepancy in the number of employees’ in 2016-17 in Khadi industry
is because of enabling Aadhaar. Out of the total 18.8 lakh additional
employment generated in village industries since 2014-15, 33.5% of it was added
in 2018-19. It should be noted that 2018-19 data is provisional and is up to 19
June 2019 throughout the story.

Khadi promotion_Cumulative employment of Khadi

PMEGP
was launched in 2008 by MSME after merging the erstwhile schemes

PMEGP is a credit
linked subsidy scheme which encourages people from both rural and urban areas
to set up industries to generate employment opportunities in non-farm sector. The
programme was launched in 2008 by the Ministry of Micro, Small and Medium Enterprises after merging the
former schemes, the Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment
Generation Programme (REGP). Subsidy ranging from 15% to 35% of the project
cost 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 not
exceed Rs. 25 lakhs for manufacturing sector and Rs. 10 lakhs for the service
sector to be eligible to avail the benefits of the scheme.

Khadi promotion_Levels of funding under PMEGP

KVIC is the single nodal agency
responsible for implementing the programme at the national level. At the state
level, KVIBs, KVIC Directorates and District Industries Centres are the
implementing agencies. Annually, the funds for implementation of PMEGP are
released by the Union Government in lump sum to KVIC. No allocation of fund is
done state-wise. Funds allocated for PMEGP forms a large portion of the total
fund allocated to all schemes being implemented by KVIC. In 2018-19, Rs. 1968.8
crores had been allocated.

Khadi promotion_funds allocated for PMEGP

2018-19
data suggests that 5.87 lakh employment opportunities were generated in that
period under PMEGP

Data provided by MSME Ministry on
employment generation and number of projects which have been
undertaken with the aid of PMEGP is represented in the following chart. A
general trend is not visible. The year 2018-19 has witnessed exceptional
increase in employment generation and number of projects as compared to the previous
years. This could be primarily on account of a larger fund release in an
election year. A total of 73,427 units have been set up generating 5.87 lakhs
employment opportunities in 2018-19. It has to be noted that all this data is
self-reported by these units and is not cross-verified.

Khadi promotion_estimated employment generated under PMEGP

Jammu
and Kashmir had the largest number of units set up in 2018-19

The maximum number of units, set up in
2018-19, around 7529 units, were in the then state of Jammu and Kashmir
generating an estimated employment of 60,232. Following J&K are the states
of Maharashtra (including Dadra and Nagar Haveli), Tamil Nadu and Uttar Pradesh
reported more than 5000 units each and employment to more than 40,000 people in
each of these states.

PMEGP
can be clubbed with other schemes such as MUDRA

Subsidy is now paid directly into the
beneficiary’s account through Direct Benefit Transfer (DBT) under PMEGP. The
entire process from application to transfer of subsidy to account has been
digitalised since 01 July 2016. This has helped in making the system
transparent and reduced the interference of middlemen as per government’s
response in the Lok Sabha.

PMEGP is different from Pradhan Mantri Mudra Yojana. Under PMMY, no
subsidy is given for the loan unless the loan proposal is linked to another
government scheme such as PMEGP, in which case, the proposal will be eligible
under both. Mudra scheme extends
refinance support to banks, micro finance institutions, NBFCs and others which
are involved in lending money for income generating activities in non-farm
sector.  

Conducting exhibitions, signing MoUs
with corporates, introducing ‘Khadi Mark’ on products, supplying Khadi to
government departments and PSUs, capturing international market and opening new
outlets are some other initiatives taken by KVIC to promote the use of Khadi
and boost its market.

This year, which marks the 150th birth anniversary of Mahatma Gandhi, will hopefully continue to spur the growth of Khadi.

Featured Image: Khadi promotion by the government

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