🧶 Khadi & Village Industries
KVIC schemes — Khadi Vikas Yojana (MMDA, ISEC, Work-Shed), Gramodyog Vikas Yojana, and related programmes
Introduction to KVIC
The Khadi and Village Industries Commission (KVIC) is a statutory body established under the Khadi and Village Industries Commission Act, 1956. It came into existence in April 1957, taking over the functions of the erstwhile All India Khadi and Village Industries Board.
KVIC is charged with the planning, promotion, organisation, and implementation of programmes for the development of Khadi and Village Industries (KVI) in rural areas.
Key Functions of KVIC
- Plan and organise the development of Khadi and Village Industries in the rural areas.
- Build and maintain reserves of raw materials and arrange for supply of implements and tools to artisans.
- Establish and maintain common service centres (testing, dyeing, etc.) for producers.
- Market products — facilitate marketing of Khadi and Village Industry products.
- Train artisans through capacity building and skill development programmes.
- Provide financial support through grants, subsidies, and concessional credit to KVI institutions and artisans.
Khadi Vikas Yojana
Khadi Vikas Yojana is the umbrella programme through which KVIC channels its support for Khadi production and marketing. It includes several sub-schemes:
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Introduction to KVIC
The Khadi and Village Industries Commission (KVIC) is a statutory body established under the Khadi and Village Industries Commission Act, 1956. It came into existence in April 1957, taking over the functions of the erstwhile All India Khadi and Village Industries Board.
KVIC is charged with the planning, promotion, organisation, and implementation of programmes for the development of Khadi and Village Industries (KVI) in rural areas.
Key Functions of KVIC
- Plan and organise the development of Khadi and Village Industries in the rural areas.
- Build and maintain reserves of raw materials and arrange for supply of implements and tools to artisans.
- Establish and maintain common service centres (testing, dyeing, etc.) for producers.
- Market products — facilitate marketing of Khadi and Village Industry products.
- Train artisans through capacity building and skill development programmes.
- Provide financial support through grants, subsidies, and concessional credit to KVI institutions and artisans.
Khadi Vikas Yojana
Khadi Vikas Yojana is the umbrella programme through which KVIC channels its support for Khadi production and marketing. It includes several sub-schemes:
1. Modified Market Development Assistance (MMDA)
Objective: To increase artisans' earnings and ensure quality of Khadi.
MMDA is a grant-based scheme designed to make Khadi competitive in the market by subsidising its cost.
- MMDA grant is calculated at 30% of the Prime Cost of Khadi & Polyvastra.
- The grant is split between institutions and artisans:
- 60% of the MMDA grant goes to Khadi Institutions undertaking production and sales activities.
- The remaining 40% is distributed among spinners, weavers, and other artisans directly involved in production.
- The scheme incentivises institutions to maintain quality standards while ensuring artisans receive a fair share of the benefit.
Why 60-40? The institution's share covers overhead costs — raw material procurement, quality checks, marketing, and showroom operations. The artisan's share directly supplements their earnings, making Khadi production a more viable livelihood.
2. Interest Subsidy Eligibility Certification (ISEC) Scheme
Objective: To offer credit at a concessional rate of interest to Khadi Institutions.
The ISEC Scheme bridges the gap between market lending rates and the repaying capacity of Khadi institutions.
- Also aims to mobilise funds from banking institutions for Khadi programmes.
- Provides financial assistance to Khadi institutions for their working capital and other credit needs.
- Under ISEC, KVIC issues an eligibility certificate to the institution, which the institution presents to the bank. The bank then extends credit, and KVIC reimburses the difference in interest directly to the bank.
Eligible Organisations
All of the following are eligible under the ISEC Scheme:
| Category | Description |
|---|---|
| Khadi Institutions | All Khadi Institutions registered with KVIC |
| State KVIBs | State Khadi and Village Industries Boards |
| Financial Institutions / Banks | Banks and financial institutions participating in the programme |
Exam Tip: When asked "Who is eligible under ISEC?", the answer is typically "All of the above" — covering Khadi institutions, State KVIBs, and financial institutions/banks.
3. Work-Shed Scheme for Khadi Artisans
Objective: To facilitate and empower Khadi spinners and weavers by providing proper work-shed facilities.
Many Khadi artisans work in cramped, poorly lit home spaces. This scheme addresses that problem:
- Provides dedicated work-shed infrastructure to artisans for better working conditions.
- Also aims to enhance the production and technical know-how of pottery artisans.
- Helps improve productivity and quality of output by providing a proper workspace with ventilation, lighting, and space for equipment.
- Artisans can house their charkhas, looms, and raw materials in these work-sheds.
4. Strengthening of Infrastructure
This component focuses on modernising the physical and technical infrastructure of Khadi institutions:
- Building and upgrading infrastructure for Khadi institutions — dyeing units, processing centres, and godowns.
- Modernization of charkhas and looms — replacing old, manual equipment with improved, semi-automatic versions to boost productivity while retaining the handmade character of Khadi.
- Setting up common facility centres for testing, quality control, and finishing.
Gramodyog Vikas Yojana
Gramodyog Vikas Yojana targets non-Khadi village industries to create sustainable rural employment. It covers a range of traditional industries.
1. Agarbatti Making Project
Objective: To create sustainable employment for Agarbatti artisans and increase their wages.
- Eligibility: Any person aged 18 to 55 years with proper identification documents.
- Aims to reduce imports and increase indigenous production of Agarbatti (India was a major importer of raw Agarbatti sticks from countries like Vietnam and China).
- Training provided to artisans in modern Agarbatti-making techniques.
- Focus on creating cluster-based production units for economies of scale.
2. Honey Mission
Promotion of scientific beekeeping across the country:
- Training and distribution of bee colonies and bee boxes to rural beneficiaries.
- Setting up honey processing and bottling units.
- Creating market linkages for honey and other bee products (beeswax, royal jelly, propolis).
3. Leather Development
- Support for artisans in the leather and footwear sector.
- Provision of modern tools and equipment for leather processing.
- Training in design, finishing, and quality improvement.
4. Pottery Development
- Modernization of pottery units — replacing traditional kilns with improved, fuel-efficient ones.
- Training in advanced pottery techniques including glazing and decorative methods.
- Introduction of electric pottery wheels to improve productivity.
Promotion of MSMEs in NER & Sikkim
Special schemes exist for promoting MSMEs in the North Eastern Region (NER) and Sikkim.
- Higher subsidy rates are offered for enterprises established in NER compared to the rest of the country.
- Eligible: State Government or State Government organisations promoting MSMEs in NER.
- Focus on creating employment and livelihood opportunities in remote and underserved areas.
- Covers sectors such as food processing, handloom, handicraft, bamboo, and other locally relevant industries.
The NER comprises eight states: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura.
National SC-ST Hub Scheme (NSSH)
Objective: To strengthen and support SC/ST entrepreneurs through capacity building and facilitating market access.
The NSSH was launched to address the underrepresentation of SC/ST communities in the MSME ecosystem.
- NSSH provides support through capacity building, marketing, mentoring, and handholding of SC/ST entrepreneurs.
- Implemented by: NSIC (National Small Industries Corporation) under the Ministry of MSME.
- Key activities include:
- Awareness programmes about government procurement policies and schemes.
- Vendor development programmes to help SC/ST enterprises become suppliers to large public sector undertakings.
- Special credit facilitation — connecting entrepreneurs with banks and financial institutions.
- Skill development and capacity building through workshops and training.
Summary Cheat Sheet
| Parameter | Details |
|---|---|
| KVIC Established | April 1957 |
| Predecessor | All India Khadi and Village Industries Board |
| MMDA Grant Rate | 30% of Prime Cost of Khadi & Polyvastra |
| MMDA Split | 60% to Institutions, 40% to Artisans |
| ISEC Objective | Concessional credit to Khadi Institutions |
| ISEC Eligibility | Khadi Institutions + State KVIBs + Banks — All of the above |
| Work-Shed Scheme | Work-sheds for spinners and weavers |
| Agarbatti Project | Employment for artisans; age 18–55 years |
| NER MSME Promotion | Higher subsidies; eligible: State Govt / State Govt organisations |
| NSSH Objective | Capacity building + market access for SC/ST entrepreneurs |
| NSSH Implemented By | NSIC (National Small Industries Corporation) |
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