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ADB sanctions $150 mn for khadi development
Jan '10
On request of Chairperson, Khadi and Village Industries Commission to Finance Minister, Govt. of India for a sizable assistance to KVI sector keeping in view of inadequacy in support to take care of the need for sustainability of employment in the rural areas of the country, the Finance Ministry agreed to the need of the sector, as reported under a study, decided for extension of such support through Asian Development Bank (ADB). The ADB conveyed its Board approval for sanction of US $150 million for the programme captioned "Khadi Reform and Development Programme".

In order to fully realize the significant growth potential of KVI sector in terms of employment generation, enhance earnings of artisans and also to ensure positioning of Khadi in consonance with the current market needs, holistic reform measures for Khadi sub sector are envisaged. The Khadi reform and Development programme initiated by Govt. of India with the support of Asian Development Bank (ADB) is an effort in that direction.

The 11th Five Year Plan notes khadi production has huge employment prospects, particularly among women and minorities. Revitalization the khadi industry is expected to bolster employment opportunities in rural India. The ADB loan, which will be released in four tranches over a period of three years, will help revitalize the khadi industry through a comprehensive reform package. The Khadi Reform Package envisages reform support in the following areas.

•Marketing Organization:
A marketing organization will be set up with majority private partnership to bring the modern concept of marketing in the sector.

•Khadi Mark Development:
KVIC will develop Khadi Mark for positioning khadi as a guaranteed hand spun and hand woven cloth ensuring specified base earning of artisans.

•Raw material procurement and Production:
KVIC will disengage from production of sliver / roving through infusion of Public Private Partnership (PPP) by good khadi institution / federation etc.

•Artisan Earnings and Empowerment:
Phased replacement of implements and improving the technology to make spinning and weaving implements more efficient and less prone to drudgery. Further, the institutions implementing direct reform programme will have to switch over to working in SHG mode, nominating representative of SHGs to the extent of 50% in the managing committees. The surplus to be earned by Khadi institutions through introduction of benefit chart will also go to artisans.

•Skill Development through Quality Training Facilities: Enabling participation in the management of khadi institution both existing and new khadi ventures providing frame work for artisan empowerment.

•Market-linked pricing and introduction of Benefit Chart: Khadi institutions will be encouraged to formulate pricing strategies as determined by market forces through a mechanism of benefit chart.

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