Road Map for KVIC in XII Plan

One of the most significant aspects of Khadi and Village Industries (KVI) in Indian economy is that it provides sustainable employment to rural artisans. The Working Group on Micro, Small & Medium Enterprises Growth for 12th Five Year Plan (2012-2017) has recommended a road map for projecting Khadi as well as Village Industries as pure, ethnic and environment friendly products in the global market.

To realize the growth potential of KVI sector, it is necessary that production, value addition and sale grow sustainably. The XII plan approach paper requires that manufacturing sector grows at 11-12% annually and an overall growth of 9-10% is realized. Accordingly, keeping an eye on the sectoral growth potential and the requirement of plan mandate, a growth of 13% has been envisaged for khadi and village industries production (khadi-11%, village industries-13%). During the first four years of XI plan period, KVI production has grown 9.1% annually.

Value addition is taken as a major thrust area in order to make khadi activities attractive and economically viable. KVIC had set an objective of achieving 70% value addition. This will need to be enhanced to at least 100% and will need to be monitored through an appropriate measurement mechanism.

Major thrust area of value addition in khadi have been identified as:-
Focusing on eco-friendly and natural products of the sector.
Identification and development of heritage village covering KVI activities.
Integrated inputs relating to credit, technology, marketing intervention, capacity building, innovations, skill development, infrastructure support, etc. to be provided under cluster approach.
Identification of surplus land with KVIC and KVI Institutions and work out action plan for effective utilization of land.
Innovations in design, technology product development and processes.
Developing KVI products for users of all age group.
Introducing interventions and promotional measures to increase the market share of KVI products to provide more employment opportunities for rural folk.
Make departmental sales outlets and Central Sliver Plants vibrant and centers for generating surplus.
The following is the projected Production of Khadi & V.I. for the XII Plan
                                                                                                                            (in Rs. crore)
V. I.


Compound Annual growth rate

The proposal includes recognizing khadi activities as work of art and khadi artisans as artists. The existing Market Development Assistance (MDA) scheme provides for 25% share for artisans as additional incentive in the MDA on khadi production. Such incentive will be continued under modified MDA.

Propagation of Indian khadi will be made more focussed in terms of its eco-friendliness, bio-degradability, ready availability, and its unique character of an exquisite heritage product, ethnic, hand-woven and humane.

Special thrust will be given on KVI export through enhanced participation in international exhibitions, business delegations and buyer-seller meet and also through special promotional events abroad.

Action will be ensured on time-bound priority apropos Khadi Mark to develop it as an authentic mark of purity and genuineness of khadi. Existing khadi certification regulations are already being revised to provide for Khadi Mark. There will be independent third party validation of genuineness for issuing and renewal of Khadi Mark.

Mahatma Gandhi Institute for Rural Industrialisation (MGIRI) will be developed during the XII plan as a centre of excellence in rural industrialization by strengthening and expansion of the interface with reputed technological institutions, nurturing innovative ideas in rural industrialization, development of products/processes and technology dissemination providing quality testing and guidance to rural enterprise.

A cluster based scheme named SFURTI was launched during 2005-06 and was mostly implemented during the XI plan period in 29 khadi and 50 village industries clusters. External evaluation study has been conducted in respect of KVI clusters and the results are encouraging. It is proposed to take up 915 KVI clusters with enhanced quantum of grants under a scheme with a proposed outlay of Rs. 1000 crore.

Prime Minister’s Employment Generation Programme (PMEGP) has created new hopes among youth, particularly the educated unemployed, of becoming entrepreneurs themselves. It is proposed to upscale the scheme for creation of jobs in manufacturing sector with enhanced project cost ceiling (but reduced subsidy for bigger projects). A tentative outlay of Rs.9700 crore including Rs. 9200 crore as margin money subsidy and Rs. 500 crore as backward and forward linkage component has been proposed for creation of 32 lakh employment opportunities through creation of 4 lakh micro enterprises during XII plan.

Existing Schemes that are proposed to be continued in the XII Plan are - PMEGP, KRDP, MGIRI, ISEC, MDA , JBY and SFURTI.

New scheme that are proposed to be introduced in the XII Plan - Scheme for KVI/CBC Loan Waiver/Settlement – this is for write off of old loans by a one-time waiver/settlement. A tentative outlay of Rs 300 crore has been proposed for a proposed write off/settlement in respect of pre-CBC and CBC loans so that the institutions could start their operation afresh with a clean slate.

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