KVIC INTRODUCTION

The Khadi and Village Industries

Commission (KVIC) is a statutory body formed
by the Government of India, under the Act of
Parliament, 'Khadi and Village Industries
Commission Act of 1956‘. KVIC works under the
administrative control of the Ministry of Industry,
Government Of India under the department of
Small-Scale Industries and Agro and Rural
Industries. KVIC has a 10 member commission at
the policy making level. The Commission consists
of six zonal members (one of whom is Chairman),
two expert members and two official members
(the Chief Executive officer and the Financial
Advisor to the Commission). The Chairman, CEO
and FA are full time members.
 
 The head quarters of KVIC is in Bombay
and it has its State and Regional Offices
in all the States. It has training,
production and Sales centers through
out the country. KVIC is having 30 State
khadi and village industries board, over
3500 institutions and over 29000 co-
operative societies. There are around
14200 sales outlets in the country in
KVI Sector. It is having 46% women
participation in its activities. 30%
beneficiaries belongs to SC/ST. KVI
Boards assist over 5 lakh artisans. It
has reached 2.35 lakh villages.

 It is a statutory organization engaged in
promoting and developing khadi and village
industries for providing employment
opportunities in the rural areas, thereby
strengthening the rural economy of the
country. It took over the activities from the
erstwhile All India Khadi and Village Industries
Board w.e.f. 01 April 1957. KVIC has been
identified as one of the major organizations in
the decentralized sector for generating non-
farm employment opportunities in rural areas
at low per capita investment. It undertakes
activities like skill improvement, transfer of
technology, research & development,
marketing, etc., in the process of generating
employment/self-employment opportunities in
rural areas.
 Terminology
 Khadi
 "The livery of freedom" – Mahatma Gandhi
 Khadi, (pronounced Khādī) refers to handspun and hand-woven
cloth. The raw materials may be cotton, silk, or wool, which
are spun into threads on a Charkha (A traditional spinning
implement).
 Khadi was launched in 1920 as a political weapon in the
Swadeshi movement of Mahatma Gandhi.
 Khadi is sourced from different parts of India, depending upon its
raw materials - While the silk variety is sourced from West
Bengal, Bihar, Orissa and North Eastern states, the cotton
variety comes from Andhra Pradesh, Uttar Pradesh, Bihar and
West Bengal. Khadi poly is spun in Gujarat and Rajasthan
while Haryana, Himachal Pradesh and Jammu and Kashmir
are known for the woolen variety.
 Village Industry
 Any Industry that is located within a rural area, where the Fixed
Capital Investment per artisan(weaver) does not exceed
Rupees One Lakh The Fixed Capital Investment can be
changed by the Central Government of India whenever it so
requires.
Relevance of the Industries
 The common characteristic found in both -
Khadi and Village Industries is that they
are labor intensive in nature. In the wake
of industrialization, and the mechanization
of almost all processes, Khadi and Village
industries are suited like no other to a
labor surplus country like India.
 Another advantage of Khadi and Village
Industries is that they require little or no
capital to set up, thereby making them an
economically viable option for the rural
poor. This is an important point with
reference to India in view of its stark
income, regional and rural/urban
inequalities.

Objectives of the commision
 The Commission has three main
objectives which guide its functioning.
These are -
 The Social Objective - Providing
employment in rural areas
 The Economic Objective - Providing
salable articles
 The Wider Objective - Creating self-
reliance amongst people and building up a
strong rural community spirit.
 The commission seeks to achieve these
objectives by implementing and
monitoring various schemes and
programs.
 Functions

 The functions of KVIC as prescribed under the KVIC
Act, 1956 (61 of 1956) and Rules made there
under, are as follows:
 To plan and organize training of persons employed or
desirous of seeking employment in khadi and
village industries;
 To build up reserves of raw materials and implements
and supply them or arrange supply of raw
materials and implements, to persons engaged or
likely to be engaged in production of handspun
yarn or khadi or village industries at such rates as
the Commission may decide;
 To encourage and assist in the creation of common
service facilities for the processing of raw
materials or semi-finished goods and for otherwise
facilitating production and marketing of khadi or
products of village industries;
 To promote the sale and marketing of khadi or products of
village industries or handicrafts and for this purpose to
forge links with established marketing agencies
wherever necessary and feasible;
 To encourage and promote research in the technology
used in khadi and village industries, including the use
of non-conventional energy and electric power with a
view to increasing productivity, eliminating drudgery
and otherwise enhancing their competitive capacity
and arranging dissemination of salient results obtained
from such research;
 To undertake directly or through other agencies, studies of
the problems of khadi or village industries;
 To provide financial assistance directly or through
specified agencies to institutions or persons engaged in
the development and operation of khadi or village
industries and guide them through supply of designs,
prototypes and other technical information for the
purpose of producing goods and services for which
there is effective demand in the opinion of the
Commission;
 To undertake directly or through specified agencies,
experiments or pilot projects which in the opinion
of the Commission are necessary for the
development of khadi and village industries;
 To establish and maintain separate organisations for
the purpose of carrying out any or all of the above
matters;
 To promote and encourage cooperative efforts among
the manufacturers of khadi or persons engaged in
village industries;
 To ensure genuineness and to set up standards of
quality and ensure that products of khadi and
village industries do conform to the said
standards, including issue of certificates or letters
of recognition to the concerned persons; and
 To carry out any other activity incidental to the
above.
Schemes & Programs of the Commission

 Prime Ministers Employment

Generation Program (PMEGP)


 Interest Subsidy Eligibility

Certification Scheme (ISEC)


 Rebate Scheme
 Support to the Commission
 The Union Government through the Ministry of Micro,
Small and Medium Enterprises, provides funds to the
Commission under two heads: Plan and Non – Plan. The
funds provided under the ‘Plan’ Head are allocated by
the commission to its implementing agencies. The
funds provided under the ‘Non – Plan’ head are mainly
for the Commission’s administrative expenditure.
Funds are provided mainly by a way of Grants and
Loans.
 Grants
 A major part of the Khadi grant is being utilized for the
payment of sales rebate, which is considered a
promotional expenditure. Other expenditures under
this head are: Training, Publicity, Marketing, Interest
Subsidy on bank loans under ISEC scheme
 Loans
 Expenditures under this head include: Working Capital
Expenditure and Fixed Capital Expenditure Fixed
Capital expenditure further consists of expenditure on -
 a) Machinery b) Implements c) Work sheds d) Sales
 Sale of Products
 The products produced by the institutions
are either sold by them directly,
through retailers, wholesalers, or
indirectly, through "Khadi Bhandars"
(Khadi sales outlets owned by the
government)
 In total, there are 15431 sales outlets, out
of which 7,050 are owned by the
commission. These are spread all over
India.
 The products are also sold internationally
through exhibitions arranged by the
commission.