Khadi Gramodyog Vikas Yojana to continue till FY20

20 Feb '19

2 min read

India’s Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, recently approved continuation of the Market Promotion and Development Assistance (MPDA) scheme, Khadi Grant, interest subsidy eligibility certificate (ISEC) and Village Industry Grant, all subsumed under Khadi and Gramodyog Vikas Yojana, at a cost of ₹2,800 crore till 2019-20.

It also approved a new component of 'Rozgar Yukt Gaon' (RYG) scheme to introduce enterprise-based operation in the khadi sector and to create employment opportunities for thousands of new artisans in the current and next fiscals, according to a press release from the ministry of micro, small and medium enterprises (MSME).

The RYG scheme aims at introducing an enterprise-led business model in place of a subsidy-led model through partnership among three stakeholders—Khadi Reform Development Programme (KRDP)-assisted institutions, artisans and the business partner.

It will be rolled out in 50 villages by providing 10,000 charkhas (spinning wheels), 2000 looms and 100 warping units to khadi artisans, and would create direct employment for 250 artisans per village. The total capital investment per village will be ₹72 lakh as subsidy and ₹1.64 crore in terms of working capital from the business partner.

Another intervention is to set up four design houses across the country—with an investment of ₹5 crore each—to capture regional variations, to provide access to khadi institutions, and to evolve modern designs and ethnic wear.

The other key component is to make the production assistance competitive and incentive based. While the khadi institutions would automatically be given the financial assistance of 30 per cent, to be eligible for the additional incentive of 30 per cent, these institutions must strive for efficiency, optimal utilisation of resources, reduction of waste and effective managerial practices.

As a part of a rationalisation exercise, eight different schemes of Khadi & Village Industries Commission are now merged under two umbrella heads—Khadi Vikas Yojana and Gramodyog Vikas Yojana.

The Khadi Vikas Yojana comprises MPDA, ISEC, Workshed, Strengthening Weak Infra, Aam Aadmi Bima Yojana, Khadi Grant and Khadi & Village Industries Science & Technology schemes. (DS)

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