Khadi - The Fabric of Freedom and Fashion

The first true Indian designer was Mahatma Gandhi when he urged the people of India to wear khadi garments. It was
not only a call to create self reliance but a call to create self reliance but a call to wear something that could prove the
unity of India. Khadi was given a more important status by Gandhi after his return from South Africa. While in
search of the charkha Gandhi felt that for a nation to turn self-reliant, it had to return to indigenous manufactured
goods.

Gandhi wrote. Swaraj (self-rule) without swadeshi (country made goods) is a lifeless corpse and if Swadeshi is the soul
of Swaraj, khadi is the essence of swedeshi. Therefore khadi became not only a symbol of revolution and resistance but
part of an Indian identity.

Gandhi confessed though, When I first discovered the spinning wheel it was purely through intuition. It was not backed
by knowledge so much so that I confused charkha with kargha (handloom).

These two forms of fabrics have always confused people. While khadi is hand made, handloom yarn is processed at
the mills.

Many fashion conscious Indians will know that India’s rendezvour with textile dates back to ancient times when the
Aryans in the Vedic period produced their own cloth. In fact, khadi (which means any cloth that is hand spun and hand
woven) had a most religious role in marriages when brides in India were presented with a khada charkha in their
wedding trousseau to encourage spinning of the yarn.

Roman gold, says history, paid for the import of Indian textiles, while Alexander the Great, when he invaded the
country in 327 BC, was dazzled by the art of fabric making and printing as also was Marco Polo the Venetian traveler.
It was in 1921 that Gandhi launched the movement of spin your own cloth and buy hand spun cloth which gained
momentum making khadi the fabric of the freedom struggle.

Around that time Gandhi used khadi as the uniform for the first Non Cooperation movement and the Gandhi cap had
strong symbolic overtones- that of the Indo-British battle over the looms of Manchester and a bid for a modern Indian
identity. So deep rooted was the sentiment attached to this fabric that Pandit Nehru wove for his daughter Indira a
wedding sari in salmon pink khadi while he was in jail. This sari is still worn by women of the Nehru-Gandhi family
on their wedding day.

In 1953 when the Khadi and Village Industries Board was established it had only 156 registered institutions. Today
every village however remote or small has it own khadi institutions. Initially the weaving of khadi was rather difficult
as it was impossible tow eave a full length of cotton with the uneven khadi thread and at one time Gandhi is believed to
have threatened to wear a sack if he was not provided with a khadi dhoti. Today the range of khadi products is
unlimited from garments to household linen to furnishings, etc.
The weaving of khadi is preceded by the spinning of the thread on the charkha after which it goes to the bobbin
winder, warper, sizer and finally the weaver. While spinning is organized by the khadi Board, weaving is done by the
weaver at his home in an individual capacity. Spinning is mostly done by the girls and women in the villages, while
weaving is dominated by men. Because of the work involved, the price of the khadi cloth when it reaches the shops is
more than that of the mill or handloom cloth.

Khadi over the decades has moved from a freedom fighter’s identity fabric to a fashion garment. At one time it was
scorned as fabric for the farmer and the rural wearer. Today there is such an increasing demand for khadi is such an
increasing demand for khadi cloth that despite the million workers all over the country involved in spinning it they are
unable to meet the demands of the market.

In 1989 the first high fashion khadi show was presented in Mumbai by the Khadi and Village Industries Commission
(KVIC) where nearly 85 dazzling garments were created by Devika Bhojwani.

There was an exciting array of eastern and western attire. Devika had launched the Swadesi label in 1985 which was
distributed through nearly 5000 Khadi Gramodyog Bhandars and Emporia.

In 1990 designer Ritu Kumar of Delhi presented her first Khadi collection at the Crafts Museum. Her Tree of Life
show, an audio visual tableau spanning the history of textiles in India, showed the design lexicon of the country, the
creators of textiles, those who have regenerated textile crafts and those who would wear the garments.

Eight collections were presented of which khadi was a very significant one. Since then the Tree of Life show has been
presented several times for charity and caused a stir with its creations. Once again in 1997 Ritu Kumar presented the
Tree of Life shown this time in London where the British were amazed with her khadi collections.

Once the sign of freedom, Khadi today holds it own on the fashion scene… it is a part of every wardrobe when it
comes to selecting fabric with a discerning eye, informs Rity Kumar.

Today the younger generation may draw inspiration from the way film and MTV stars are dressing, but there was a
time when fashion too was dictated by our political leaders More than the dresses it was what they signified and the
fiery personalities behind them that caught the imagination of the masses and influenced them to unwaveringly follow
the footsteps of their leaders, even in adapting the way they dressed, recalls Ritu Kumar.

Reveals Ritu, Actually, they were the first generation growing up after Independence and so the need to underline their
identity was immense. There was also the need to emerge with something totally different and in opposition from the
dress code foreign rulers had imposed.
Another person who ahs been working regularly with khadi is Kamal Wadkar, the well know promoter of traditional
crafts. For decades khadi has been associated with rural wear. Although many would say it is just the right fabric for
the Indian climate due to its loose weave and cool texture, khadi lacked that touch of style which other fabrics like
rubia, linen or cotton had observes Kamal.

Kamal has been associated with the Gujarat Handicrafts Board (Gurjari) and the Mumbai Khadi Sangh. Her
exhibitions in Mumbai for KVIC (Khadi Village Industries Commission) have netted nearly Rs.12.5 million. Kamal
has presented nearly 4500 garments in 150 styles in different colours weaves and embellishment with prices ranging
from Rs.460-750.

Her exhibition titled Elegance in Khadi and Khubsoorat Khadi with eight designer collections presented ethnic wear in
varied forms besides western garments.

But since Khadi is woven by hand in villages it is often difficult to provide large quantities of the fabric at short notice.
Yet it is this handmade quality of the fabric with its inherent defects that is the beauty of Khadi and that is what the
buyer wants at times. Says Kamal it is not a poor man’s fabric although it provides employment to the poor man. It is a
very up-market fabric emphasizes Kamal. Khadi dhotis are turned into printed Kurtas and dupattas.

There are times when the price and coarseness of the fabric deterred the fashion conscious from wearing it. But today
khadi has many faces which are not just restricted to cotton. There is Khadi is quite competitive now and depending on
the style of the garment it could range between Rs.400-2500.

There is a quaint story of how Gandhi while visiting a poor village spoke to an old woman huddled in her dark dingy
hut asking if there was anything she needed. The woman said she had everything pointing to an old charkha in the
corner.

The rediscovery of the charkha has brought in a new economic thinking for Indians. It has given new life to the
individual made him more resourceful and self dependent. Making khadi a true start of democracy in the true sense.
Khadi, however, can no longer be sold on an emotional level. A new approach has to be adopted for the new
generation who are unaware of its original implications. It will be worthwhile for the young and trendy generations of
the 90s to discover the beauty of khadi and support is as a fabric of our tradition.

Khadi - Recent Status and Future Scope

The present infrastructure set up of the Khadi sector in India speaks volumes about its importance in
the Country’s Economy.

A.
Cotton, Silk, Wool & Muslin

Spindles installed 2.18 million

Yarn Produced 25.91 million kgs
Looms installed: 1,33,270 nos.
Employment 14.97 lakhs
Total Production 111.49 million sq.mtrs
Sales Rs.581.20 crores

B.
Polyvastra
The handspun yarn and hand-woven cloth obtained by blending polyester staple fiber with other natural fibers
Spindles installed 0.20 million
Yarn Produced 1.45 million kgs
Looms installed: 8,727 nos.
Employment 0.46 lakh
Total Production 10.05 million sq.mtrs
Sales Rs. 42.35 crores

Standardization and Quality Control Infrastructure

Khadi is produced by interlacement of handspun yarn or handloom. Use of only natural fiber is permitted in Khadi
spinning. Because of vast diversity in the attitude and culture of Indian masses, the difference is bound to occur.
However, KVIC is very concerned about adherence to standard norms of quality in its produces.

Testing of Khadi is a two pronged activity viz. mechanical and chemical. Such testing
facilities are available in KVIC sector. Khadi Gramodyog Proyog Samiti, a descendent of
Sarva Seva Sangh and an affiliated institution of KVIC has got a well-equipped test house
to ascertain the qualities with respect to mechanical processing. Most of the institutions
whose size falls under the major category have got in-house facilities for mechanical
aspects. The dyeing and printing lab under Directorate of Khadi processing, Mumbai is fully
equipped for testing the fabric to ascertain wet / chemical processing aspects. Properties
indicating fastness such as washing, light perspiration and bleaching etc. can also be
tested in this lab. Stringent Quality Control mechanisms and the rising demand for Khadi
Exports have ensured a bright future for this fabric which is "the Pride of India".

ABOUT VILLAGE INDUSTRIES

A “Village Industry” means –

(i) ...any industry located in a rural area which produces any goods or renders any service with or without the
use of power and in which the fixed capital investment per head of an artisan or a worker does not exceed [one
lakh rupees] or such other sum as may, by notification in the Official Gazette, be specified from time to time by
the Central Government;

Provided that any industry specified in the Schedule and located in an area other than a rural area and
recognised as a village industry at any time before the commencement of the Khadi and Village Industries
Commission (Amendment) Act, 1987 shall, notwithstanding anything contained in the sub-clause, continue to be
a village industry under this Act;

Provided further that in the case of any industry located in a hilly area, the provisions of this sub-clause
shall have effect as if for the words "one lakh rupees", the words "one lakh and fifty thousand rupees" had been
substituted.

(ii) ...any other non-manufacturing unit established for the sole purpose of promoting, maintaining, assisting,
servicing (including mother units) or managing any village industry.
 Programme for promotion of V.I. Cluster - Rural Industry Service Centre (RISC)
for Khadi and V.I. activity up to Rs.5.00 lakhs

Title of the Programme :

Programme for promotion of V.I Cluster- Rural Industry Service Centre (RISC) for Khadi and V.I. activity.

Objectives of the Programme :

• Provide backward forward linkages to Khadi & V.I. activities in a cluster.

• To provided services like raw material support, skill up-gradation, training, Quality Control, Testing
facilities, marketing promotion, design & product development in order to strengthen the rural clusters.

Implementing Agency :

(1) KVIC and State KVIBs.

(2) National level / State level Khadi and V.I. Federations

(3) Khadi and V.I. Institutions affiliated to KVIC and KVIBs.

(4) NGO who have already worked in implementation of programme relating to development of rural artisans in
activities excluding the negative list of KVIC with financial assistance at least for 3 projects from any Ministry
of State / Central Government, CAPART, NABARD and UN agencies.

Rural Industry Service Centre (RISC):

“Rural Industry Service Centre (RISC) is the Common Facility Unit which aims to provide infrastructural support
and necessary services to the local units to upgrade their production capacity, skill upgradation and market
promotion.”

One of the following services must be covered by the Rural Industry Service Centre (RISC)

a) Provide testing facilities by establishing laboratory to ensure quality of the products.

b) Provide improved machinery/equipment to be utilised as common utility facilities by the nearby unites
/artisans to enhance production capacity or value addition of the product

c) Provide attractive and appropriate packaging facilities and machineries to the local unties / artisans for better
marketing of their products.

In addition of the above facilities RISC can also cater to following services:

i) Provide training facilities to upgrade artisan’s skill in order to increase their earnings.

ii) Provide new design or new product, diversified product in consultation with experts /agencies for a value
addition of rural manufacturing units.

iii) Provide raw material support which mainly depend on seasonal procurement.
iv) Prepare product catalogue.

Types of Khadi & Village Industries to be covered under Rural Industry Service Centre (RISC) :

• Khadi & Poly Vastra post weaving value addition facilities.

• Herbal products: Cosmetics and Medicines.
• Edible Oil,
• Detergents & Soaps.
• Honey
• Hand Made Paper
• Food processing
• Bio-Fertilizer / Bio-Pesticides / Bio Manure
• Potteries
• Leather
• Woodwork
• All other V.I. except those which are in the negative list.

Financial Pattern NE States Other areas

KVIC’s Share 90% 75%
a)
Own Contribution or Loan from 10% 25%
b) Bank/Financial Institutions

In case of North Eastern States 90% of project cost will be provided by KVIC upto a project cost of Rs.5.00
lakhs.

The financial assistance should follow the norms below:

a) Building/Infrastructure : Maximum 15% of project cost.

Plant & Machinery for manufacturing and or testing
b) facilities and packaging : Minimum 50% of project cost.

c) Raw material /new design, product Diversification, etc. : Maximum 25% of project cost.
d) Skill upgradation & training and/ or Product catalogue : Maximum 10% of Project cost.

However, a, c, d can be reduced depending upon requirements as the case may be.

Sanctioning Authority :

The project proposals to set up Rural Industry Service Centre (RISC) upto Rs. 5 lakhs will be appraised and
sanctioned by a Committee constituted for the purpose at State / Regional level, consisting of following members
:

i) Director Industry of concerned State Govt. or his representative not below the : Member
rank of Additional Director
ii) CEO of concerned State KVI Board : Member
iii) Representative of Lead Bank in the State / Region : Member
iv) Representative of NABARD : Member
v) Secretary of KVI Institution Having highest turn over in the State : Member
vi) State/Regional Director, KVIC : Member/Convenor

Terms and References :

1) The Committee will evaluate capability of the organisation to implement
2) The Committee will examine commercial viability of the project.
3) Accord approval upto project of Rs. 5 lakhs
4) Evaluate and monitor the execution of programme in the Rural Industry Service Centre (RISC)

Release of fund :

After Committee approved the proposal, the funds will be released in 2 installments by State/Regional Directors.
The first installment will be 50% of the amount share of KVIC for the project. The second and last installment will
be released only after amount released by KVIC and 50% of the share of the organisation is utilized.

Stages of Programme implementation :

• Identification of the cluster.

• Selection of a Cluster Development Agency.
• Technical feasibility by and expert or an agency.
• Project formulation.
• Approval of the project and release of funds.
• Monitoring and Evaluation.
OPERATIONALISATION AND PROGRAMME IMPLEMENTATION :

For the purpose of establishing Rural Industry Service Centre (RISC), it may be ensured that the number of
artisans / Village Industries units shall not be less than 25 individual artisans or 5 REGP units / VI Institutions /
Societies for projects upto Rs.5.00 lakhs.

The implementing agency / Organisation should have its own land where the Rural Industry Service
Centre (RISC) will be established.

The period of setting of project should not be more than 6 months.

After submission of the proposal by the implementing agency to set up Rural Industry Service Centre
(RISC), State / Regional Director shall conduct technical feasibility and place the proposal with
his recommendations before State Level Committee. Technical feasibility may done either by DIC
or by State Office or State Board

The funds shall be released based on the progress of work report received periodically from State / Regional
Director and based on activities of the project and also within a specific time frame for timely completion of the
project.

The State / Regional Director of the concerned state where the project is located shall ensure monitoring and
evaluation and timely completion of project.

After obtaining approval by the State Level Committee for setting up of project State/Regional Director will
intimate to concerned Industry Programme Directors at Central Office of the Commission.

Sd/-

Dy. Chief Executive Officer (VI)

Programme for promotion of V.I Cluster - Rural Industry Service Centre(RISC)

for Khadi and V.I. activity up to Rs. 25.00 lakhs

Title of the Programme :

Programme for promotion of V.I Cluster- Rural Industry Service Centre (RISC) for Khadi and V.I. activity.
Objectives of the Programme :

• Provide backward forward linkages to Khadi & V.I. activities in a cluster.

• To provide services like raw material support, skill up-gradation, training, Quality Control, Testing
facilities, marketing promotion, design & product development in order to strengthen the rural clusters.

Implementing Agency :

(1) KVIC and State KVIBs.

(2) National level / State level Khadi and V.I. Federations

(3) Khadi and V.I. Institutions affiliated to KVIC and KVIBs.

(4) NGO who have already worked in implementation of programme relating to development of rural artisans in
activities excluding the negative list of KVIC with financial assistance at least for 3 projects from any
Ministry of State / Central Government, CAPART, NABARD and UN agencies.

Rural Industry Service Centre (RISC) :

“Rural Industry Service Centre (RISC) is the Common Facility Unit which aims to provide infrastructural support
and necessary services to the local units to upgrade their production capacity, skill upgradation and market
promotion.”

One of the following services must be covered by the Rural Industry Service Centre (RISC)

a) Provide testing facilities by establishing laboratory to ensure quality of the products.

b) Provide improved machinery/equipment to be utilised as common utility facilities by the nearby unites
/artisans to enhance production capacity or value addition of the product

c) Provide attractive and appropriate packaging facilities and machineries to the local unties / artisans for
better marketing of their products.

In addition of the above facilities RISC can also cater to following services:

i) Provide training facilities to upgrade artisan’s skill in order to increase their earnings.

ii) Provide new design or new product, diversified product in consultation with experts /agencies for a value
addition of rural manufacturing units.

iii) Provide raw material support, which mainly depend on seasonal procurement.

iv) Prepare product catalogue.

Types of Khadi & Village Industries to be covered under Rural Industry Service Centre (RISC) :

• Khadi & Poly Vastra post weaving value addition facilities.

• Herbal products: Cosmetics and Medicines.
• Edible Oil,
• Detergents & Soaps.
• Honey
 • Hand Made Paper
• Food processing
• Bio-Fertilizer / Bio-Pesticides / Bio Manure
• Pottery
• Leather
• Woodwork
• All other V.I. except those which are in the negative list.

Financial Pattern NE States Other areas

a. KVIC’s Share 90% 75%

b. Own Contribution

or Loan from Bank/ 10% 25%

Financial Institutions

In case of North Eastern States 90% of project cost will be provided by KVIC upto a project cost of Rs.25.00
lakhs.

The financial assistance should follow the norms below:

a) Building/Infrastructure : Maximum 15% of project cost.

Plant & Machinery for manufacturing and or testing
b) facilities and packaging : Minimum 50% of project cost.

c) Raw material /new design, product Diversification, etc. : Maximum 25% of project cost.
d) Skill upgradation & training and/ or Product catalogue : Maximum 10% of Project cost.

However, a, c, d can be reduced depending upon requirements as the case may be.

Appraisal and Recommendation Authority :

The project proposals to set up Rural Industry Service Centre (RISC) upto Rs. 25 lakhs will be scrutinized and
recommend by a Committee constituted for the purpose at State / Regional level, consisting of following
members for sanction:

i) Director Industry of concerned State Govt. or his representative not below the : Member
rank of Additional Director
ii) CEO of concerned State KVI Board : Member
iii) Representative of Lead Bank in the State / Region : Member
iv) Representative of NABARD : Member
v) Secretary of KVI Institution Having highest turn over in the State : Member
vi) State/Regional Director, KVIC : Member/Convenor

Terms and References :

The Committee will evaluate capability of the organisation to implement

The Committee will examine commercial viability of the project.
Evaluate and monitor the execution of programme in the Rural Industry Service Centre (RISC)

Technical appraisal Committee :

The project proposals to set up Rural Industry Service Centre (RISC) upto Rs. 25 lakhs will be technically
appraised by a Committee constituted for the purpose at Central level, Central Office, KVIC, Mumbai-56,
consisting of following members after appraisal and recommendation of State / Regional level Committee:

i) Financial Advisor, KVIC : Chairman

ii) General Manager of lead Bank : Member
iii) One Expert Member from IIT Concerned with subject of the project : Member
iv) Dy. Chief Executive Offcer (VI) : Member
v) Director (Finance) : Member
vi) Programme/Industry Director : Member
vii) Director (VIC) : Member / Convenor

Terms and References :

The Committee will evaluate the recommendation of the State / Regional level Committee before Technically
appraised the Project.

The Committee will examine commercial viability of the project.

The Committee will examine the collateral security or surety bond submitted by the implementing agency and
recommended by the State / Regional level Committee.

Mode of Sanction :

Once the project up to Rs. 25.00 lakhs have been technically appraised by the Technically Appraisal Committee,
the concern Industry/Programme Director will process the proposal and placed before the SFC either Khadi and
VI as the case may be.

Security for Release of fund :

Surety Bond must be submitted against the release to the tune of 90% of the project cost of maximum upto Rs.
25.00 Lakhs for NEZ and 100% women artisan best institution/organisation and 75% of the project cost of
maximum Rs.25.00 lakhs for others.

The surety Bond must be register with the competent authority of the State the following points must be taken
into account while submitting the Surety Bond to KVIC.

1. Resolution of the institution.

2. Original Surety Bond duly stamped (Non-Judicial) as per the stamp Act of the State.

3. Original Valuation Report of the property of the Surety/ies from Government Registered valuer/Revenue
Authority.

3. Original Blue Print/Lay out plan of the property of the Surety/ies duly approved by the competent Authority.

4. Original extract of record of rights certified by the Revenue Authority.

5. Original Non-encumbrance Certificate in respect of the Property/ies from a Govt. Pleader or from the
Revenue/Competent authority certifying that the property is marketable and free from all encumbrance.

6. The Borrower should submit all extract from the revenue record evidencing that charge has been created on
the revenue record in respect of the property/ies of the surety bond/s after sanction and before release of
funds.

In addition to the surety bond the implementing agency must mortgage their assets i. e. machinery, building etc.
to the Commission created from out of the RISC fund before the release of 3rd installment.

However incase of the institution already enlisted with KVIC and carring out Khadi & VI programme and already
having infrastructure land , building, etc. and also mortgaged the property to the Commission, if they desired to
take up the RISC activity, they have to enhance the limit of EM created to the tune of RISC project and do not
required to execute surety bond.

Release of fund to state/Divisional offices of KVIC :

After SFC approval of the proposal, the funds will be released as per the guidelines prescribed in the standing
order No-1606

Mode of release of installment of funds to beneficiary institution :

1st installment for Building/Infrastructure

: Maximum 15% of project cost.
2nd installment for Plant & Machinery for manufacturing
and or testing facilities and packaging : Minimum 50% of project cost.

3rd installment for Raw material /new design, product

Diversification, etc. : Maximum 25% of project cost.

4th installment for Skill upgradation & training and/ or

Product catalogue : Maximum 10% of Project cost.

Note- 1st installment will be released on the basis of feasibility report of the field official and subsequent
installment on the basis of utilisation certificate duly inspected by the field official of the State/Divisional office
concerned and on satisfaction of the State /Divisional Director.

Stages of Programme implementation :

• Identification of the cluster.

• Selection of a Cluster Development Agency.
• Technical feasibility by and expert or an agency.
• Project formulation.
• Approval of the project and release of funds.
• Monitoring and Evaluation.
OPERATIONALISATION AND PROGRAMME IMPLEMENTATION :

For the purpose of establishing Rural Industry Service Centre (RISC), it may be ensured that the number of
artisans / Village Industries units shall not be less than 25 individual artisans or 5 REGP units / VI Institutions /
Societies for projects upto Rs.25.00 lakhs.

The implementing agency / Organisation should have its own land where the Rural Industry Service
Centre (RISC) will be established.

The period of setting of project should not be more than 6 months.

After submission of the proposal by the implementing agency to set up Rural Industry Service Centre
(RISC), State / Regional Director shall conduct technical feasibility and place the proposal with
his recommendations before State Level Committee. Technical feasibility may done either by DIC
or by State Office or State Board.

The funds shall be released based on the progress of work report received periodically from State / Regional
Director and based on activities of the project and also within a specific time frame for timely completion of the
project.

The State / Regional Director of the concerned state where the project is located shall ensure monitoring and
evaluation and timely completion of project.
After obtaining approval by the State Level Committee for setting up of project State/Regional Director will
intimate to concerned Industry Programme Directors at Central Office of the Commission.

DIRECTORATE OF MARKETING
Khadi and Village Industries Commission
' Gramodaya ',3, Irla Road, Vile Parle(West), Mumbai - 400 056.

No.MKT/EXP/Incentive/policy/590-Part II/2003-04 4th October 2005

CIRCULAR

Subject: 'Export Incentive Scheme' to assist exporters of KVI products – Reg.

The Commission in its Meeting No.526th dated 24.02.2004 considered the proposal of Ministry of
Commerce for extending "Marketing Development Assistance (MDA) to Exporters" and decided to launch an
Export Incentive Scheme for exporters of KVI products which was circulated vide Circular No. No.MKT/ EXP
/Incentive/ Policy/590-Part II/ 2003-04 Dated 17th March 2004.

A doubt has recently arisen whether there REGP units (both KVIC/KVIB's affiliated) are also entitled for
these benefits. As a part of persistent effort to boost exports in the KVI Sector it has now been decided to extend
the benefit of 'Export Incentive Schemes' to REGP Units also both KVIC & KVIB's affiliated in addition to the KVI
Institutions under the KVI Sector.

The details of the scheme are as follows:-

A. VISITS ABROAD FOR PARTICIPATING IN INTERNATIONAL TRADE FAIRS/EXHIBITIONS AND

SALES –CUM-STUDY TOUR ETC.

(a) The KVI institutions/REGP units registered with KVIC/KVIB nominated by KVIC for participating in
"International Exhibitions" will be provided 90% to and fro airfare by economy class.
(b) The KVI institutions/REGP units registered with KVIC/KVIB nominated by KVIC for participation in "Sale cum
Study Tour" abroad will be provided 90% to and fro airfare by economy class.
(c) The KVI institutions/REGP units registered with KVIC/KVIB nominated by KVIC for participating in "Sales cum
Study Tour " / Exhibitions/ Buyer Seller Meet etc. abroad, will be reimbursed 25% of the total approved cost
with an upper ceiling of Rs.15,000/- per event, towards actual expenditure incurred on publicity in terms of
bringing out product catalogue, brochure, hand outs etc.
(d) Assistance for visits abroad shall be applicable only in case of visits organized and sponsored by KVIC.
Participation by individual units of their own shall not be considered for assistance.

B. EXPORT INCENTIVE FOR EXPORTS EFFECTED:

3.The Export incentive @ 5% of actual export realization on FOB value of exports will be extended to exporting
KVI institutions/REGP units under KVI Sector as per terms and conditions blow:-

(a) All export-oriented units/institutions under KVIC including the direct listed units of KVIC, KVIB and their
aided agencies, REGP Units enlisted with the Directorate of Marketing shall submit the export claims every
year in the prescribed format (Annexure-A) and forward the same with supporting documents like G.R.
forms/Shipping bills, Original bank certificate, Audited balance sheet etc. duly countersigned by the
concerned State/Divisional Directors of the Commission. Guidelines for claiming export incentive are
enclosed at Annexure – B.
(b) Directorate of Marketing shall examine the claims reckoning those with dues to be recovered from the
Institution/REGP Unit against loans availed or any other recovery(ies).
(c) The claim (excluding recoveries effected ) shall be vetted by Director (Finance) and sanctioned with the
approval of the competent authority in terms S.O.No.1606 dated 10.04.2002.
(d) Sanction Orders would be sent to the Director of Accounts who will disburse the incentive to the said
institution/ REGP unit from out of G &M funds earmarked for the purpose after deduction of Commission's
dues, if any.
(e) The assistance/support shall be extended only to KVI Institutions/REGP Units, KVIC/KVIB and their aided
units which are "Enlisted with KVIC" for the purpose as per Annexure-III.

4.This supercedes all earlier circular on the subject and comes into effect from 1st. October 2005.

This issues with the approval of Chief Executive Officer.

Sd/-
Preamble

Khadi, the fabric of freedom, has been a source of livelihood to a large number of
spinners, weavers and other artisans spread across the country living in the rural as well as
urban areas. Though handcrafted characteristic is the USP of Khadi, use of appropriate
technological implements plays a vital role in achieving better productivity and quality besides
reducing drudgery. Sustainability of traditional khadi industry is largely dependent on
provision of facilities so that the artisans’ productivity is enhanced and competitiveness of the
activity is maintained.

The instant scheme envisages a comprehensive support to around 200 Khadi Institutions in
order to make khadi industry more productive as well as competitive and also strengthen its
potential for creation of qualitative employment.

Objective

The primary objectives of this scheme are to:

make khadi industry more competitive with more market-driven, profitable,

production and sustained employment for khadi artisans and related service providers
by replacement of obsolete and old machinery and equipment and repairs
to/renovation of existing/operational machinery and equipment;

extend an evenly balanced and need-based support in all areas of Khadi

activities viz. production, distribution, promotion and capacity building;

provide appropriate incentives to shift to market driven approach.

the scheme would cover activities up-to cloth stage and may not venture into
readymade garments.
Target Beneficiaries

The targeted beneficiaries of the scheme would be spinners, weavers, pre-weaving

artisans, washer men, dyers and printers, workers (karyakartas) of the khadi institutions,
manufacturers of tools and equipment, common service providers engaged in khadi industry
associated with selected khadi institutions from among the 200 Khadi institutions affiliated to
KVIC / State or UT KVI Boards covering all categories of institutions as detailed below:
Category A& B C SC/ST NER
A+ s
No. of institutions to 45 45 45 45 20
Criteria for be covered

Selection

The implementing agency has to be a directly aided institution of KVIC or that of

State Khadi & V.I. Board (KVIB).

The implementing agency has to be an 'A+', "A', 'B', 'C' and SC/ST institution
classified as such by the KVIC and also those registered in NER.

The implementing agency has to have a standing in the field of Khadi work for
minimum period of last 20 years and be engaged in implementing Khadi programme in
a composite manner, i.e., spinning, weaving and marketing of khadi;

The scale of the activities of the implementing agency or group of implementing

agencies in the selected scheme should be as follows:-

A minimum of 300 full time artisans should be registered with the

implementing agency up to 31.03.2006. For N.E. States – 150 full time artisans;

Production and/or average sales turn over should be at least of Rs.50.00

lakhs per annum in the last three years (up to 2005-06). In the case of North-East
States – Rs.25.00 lakhs.

Adequate land or buildings should be available with the implementing

agency so as to accommodate the infrastructure envisaged in the scheme.

The implementing agency should be able to contribute its share of financial

contribution as indicated in the scheme.

The implementing agency should replace the spinning and weaving implements
with improved spinning implements (8-spindle N.M.C./improved basins etc.) and
weaving implements (improved looms/dobby/jacquard etc.).
 The implementing agency should employ one trained supervisory spinning worker
over every 50 N.M.C./basin and trained supervisory weaving worker so that the quality
of yarn and Khadi is not compromised in the interest of marketability of the finished
product.

The implementing agency shall draw its raw-material requirement from the
nearest Central Sliver Plant of the KVIC or its local godown. In case of silk, it should be
obtained from the raw material bank operated by Central Silk Board and other
Government or quasi -Government agencies.

The institutions should have reported positive financial result for the last 5 years,
availed bank finance at least for last three years continuously and capable to procure
additional bank finance, except the newly registered SC/ST institutions and those in
NER.

The artisans to be covered under the scheme should be brought under the
umbrella of social security such as Janashree Bima Yojana and Artisans Welfare Fund
Trust of the implementing agency.

The institutions should have taken initiatives in adopting science and technology
development and research and development projects by engaging qualified and
experienced personnel as prescribed by KVIC.

The institution has to submit an action plan clearly committing that during the
scheme intervention it will double the production and ensure that the earning of
artisans increases two fold of their present earning.

The institution will also submit an undertaking to switch over to MDA Scheme
when implemented.

The institution will have to clearly indicate that they will conduct periodical
testing of their product to ensure quality, in the manner prescribed separately by KVIC.

Intervention / Support Measures

Introduction of new technology and reduction in drudgery in pre as well as post

weaving processes;

Introduction of need-based dyeing and printing facilities;

 Production of market-oriented khadi products upto cloth stage, with higher
productivity and cost competitiveness; and

Market promotion as well as capacity building at various levels and aspects in the
functioning of Khadi institution and also engagement of expert manpower for proper
implementation of the scheme.

Scheme Coverage

The Scheme will cover a total of 200 Khadi institutions encompassing all categories of institutions, as
mentioned under “para III - Target Beneficiaries” so as to maintain inclusive growth of khadi sector.

While selecting the institution for implementation of the scheme, it will be ensured that the scheme spreads all
over the country reasonably evenly. However, Khadi institutions in the less developed States and backward States will
get assistance on preference.

In the same manner, Khadi institutions while selecting artisan beneficiaries will target their coverage in such a
manner that the socially backward and weaker sections of the society are adequately represented. The representations
at least will be SC – 15%, ST – 8.2%, Minorities – 15% and Women – 30%. Detailed records in this regard will be
maintained in each assisted institution and reports furnished regularly to KVIC.
Financial Assistance

The following Table illustrates the pattern of financial assistance under the
Scheme:

Sr. Component Funding pattern under the

No scheme
.
(of total cost)
Category of Govt. Institution’s
Khadi Grant contribution
institutions (%) (%)
1 Replacement of A+, A 75 25
charkhas and looms B&C
SC, ST 90 10
(Average cost – Rs. 12 NER
lakh per institution).
2 Service Centre for A+, A 75 25
warp units ready to B&C
use warps for weaving,
SC, ST 90 10
Post loom facilities,
product testing NER
laboratory etc.

(Average cost – Rs.9 lakh

per SC).
3 Product Development A+, A 75 25
Design Intervention B&C
and Packaging SC, ST 90 10
NER
(Average cost – Rs. 2
lakh per institution).
4 Market Promotion All 90 10
Assistance categories

(Average cost – Rs. 8

lakh per institution).
5 Capacity Building All 90 10
Measures categories

Average cost – Rs. 5

lakh per institution).
6 Techno-managerial All 90 10
support categories

Average cost – Rs. 5

lakh per institution).
7 Reporting, All 100 -
documentation, categories
 studies etc.

(Lump sum Rs. 1 lakh).

It is reiterated that the scheme is restricted for activities up to cloth stage only.

Distribution of Charkhas

The equipment – charkhas, looms procured and supplied to spinners/weavers

shall be installed in their homes or in a common work shed, as relevant or applicable in
each case. The ownership of Charkhas and Looms would be given to artisans and
institutions would continue to extend all support to the artisans. The institution shall
not pass the cost of charkhas/looms on to the artisans nor shall it build in any cost
element on this account in its cost chart of khadi production. The distribution of
charkhas would be made through a tripartite Agreement (MOU) to be entered amongst
the KVIC, the khadi institution and the Artisans so as to ensure proper the utilization of
the implements in the implementation of Khadi programme. While the artisans will not
misuse the charkhas, at the same time, the institutions have to offer all backward
forward-linkages such as supply of raw material, production of finished goods against
payment of proper wages and arrangements for maintenance, overhauling, etc. Since
the implements are to be given to the artisans free of cost, in case they cease to
associate with Khadi activity, they should return implements to the institution for their
re-distribution to some other artisan. The institution would be free to forfeit the
implements from such artisans as have either stopped production or failed to ensure
proper upkeep of the implements and re-allocate these charkhas to other willing
artisans/weavers. The above requirements will be incorporated in the proposed MOU.

Implementation sequence

KVIC Central Office will arrange to issue an indicative target of institutions

State/Divisional Office-wise to be covered under the Scheme.

State/Divisional Offices of KVIC will identify as many number of institutions based

on the prescribed criteria and submit the same to KVIC Central Office.

A Steering Committee to be chaired by CEO, KVIC will examine the proposals

submitted by the field offices and extend its administrative approval to go ahead.
 The institutions will arrange to develop detailed action plan along-with financial
implication and submit to State/Divisional Office of KVIC.

State/Divisional Offices will examine the proposal through a State Level Standing
Committee and forward the proposal to KVIC Central Office for seeking financial
approval.

Financial approval will be extended with concurrence of Financial Advisor and

Chief Executive Officer, KVIC. The release of fund will be made with usual condition for
release of programme fund to implementing agencies / institution.

The institution will maintain a separate account and utilize the fund with the prior
concurrence of State Level Standing Committee. The institution will prepare detailed
expenditure budget of each item / aspect and utilize fund with the concurrence of
Standing Committee to be headed by Zonal Dy. CEO, KVIC.

State/Divisional Office, KVIC will assist the institution in the engagement of

suitable personnel as envisaged in the scheme in a transparent manner in accordance
with the specific qualification and experience prescribed by KVIC.

Implementing institutions will submit monthly progress report to State/ Divisional

Office in the prescribed format and submit the same to the State Level Standing
Committee.

State/Divisional Office will assign one official as Nodal Officer to extend all
support and guidance to the institution.

KVIC will arrange to study/ evaluate the programme, implemented by the

institutions, every six month.

KVIC will also arrange to conduct an impact study through a professional agency
and submit its report to the Ministry of MSME, after (2) two years of its
commencement.

Scheme Management: Physical as well as Financial

 Implementation of the scheme would be directly monitored / supervised by a
Nodal Officer assigned by KVIC. He will submit monthly reports in respect of
production, sales and employment in prescribed formats.

There shall be a “State Level Standing Committee” consisting of the State

Director of KVIC; CEO, State KVIB; representative of the Lead Bank of the State;
Chairman, State Level Khadi Federation and a local expert in textile and allied
profession.

The Scheme will be administered at the Central Office level of KVIC by a Steering
Committee headed by CEO, KVIC. Joint Secretary, MoMSME and Financial Advisor, KVIC
will be the Members of the Committee. Dy. CEO (Khadi), KVIC will act as its Convener.

Scheme will be sanctioned by the Steering Committee and release of funds will be
made with the concurrence of Financial Advisor, KVIC and Chief Executive Officer, KVIC.

The first installment of 50% of the project cost will be released after compliance
of necessary conditions. The balance 50% will be released only after submission of
utilization certificate rendered by a professional Chartered Accountant along with a
physical verification report of work by an official of KVIC not below the rank of Assistant
Director, KVIC.

Linkages with Existing Schemes

Since the Scheme for Enhancing Productivity and competitiveness of Khadi

industries and artisans is an extension of the concept of SFURTI scheme, the
institutions which are already implementing or identified for implementation of SFURTI
scheme shall not be selected for providing assistance under this scheme.

Further, the institution implementing this scheme will not be considered eligible
for assistance under the other schemes of KVIC like PRODIP etc.

Scheme Evaluation

The performance of the Scheme will be got evaluated through an independent

agency after (2) two years of its commencement so as to bring in further
improvements in its implementation and assess the progress.
INTRODUCTION

Khadi has been a source of livelihood for more than 8.5 lakh persons who are engaged
in the activity as spinners, weavers and artisans spread across the country. Khadi
sector represents the continuity of age-old Indian heritage of hand spinning and hand
weaving and reflects the socio-cultural tradition of the khadi artisans. The Government
of India has been following a policy of promoting and encouraging the khadi sector
through a number of policies and programmes. A growing need has been felt to
facilitate and empower khadi artisans to chart out a sustainable path for growth,
income generation and better work environment so that they are able to have a right
working atmosphere and better ambiance to enable them to carry out their spinning
and weaving work efficiently. The Workshed Scheme for Khadi Artisans (WSKA) is an
attempt to facilitate the development of khadi spinners and weavers by way of
providing them financial assistance for construction of worksheds, on a pilot basis.

OBJECTIVES OF THE SCHEME

To provide better ambiance by providing a better workplace to enable them to

carry out their spinning and weaving work efficiently.

To provide more storing and working space for housing slivers, raw material,
implements and accessories, dobby, jacquard yarn, cloth etc.

To help improve efficiency productivity of the spinners through the electrical

connection and lighting to the workshed.

ASSISTANCE UNDER THE SCHEME

Financial Assistance will be provided to those khadi artisans who belong to BPL
category. Assistance for construction of worksheds will be provided through the khadi
institutions with which these khadi artisans are associated and the quantum of
assistance will be as under:
 Component Area per unit Amount of Assistance
Construction 20 Square Rs.25,000/- or 75% of
of workshed meters the cost of the
(approximately workshed, whichever is
) less.

The additional requirements of funds over and above the financial assistance
provided by the Government of India, to meet the cost of Workshed should be
contributed by Khadi Institutions without insisting on any contribution from the
beneficiaries, who belong to BPL category and may not be able to make such
contribution. In case of individual Worksheds, the khadi institutions can also release the
additional funds assessed for construction of workshed out of the accumulations in
Artisans Welfare Fund lying to the credit of the beneficiary with State Level Artisan
Welfare Fund Trust. The financial assistance to be provided by the Government will go
to the institutions (with which the beneficiaries of the scheme are affiliated) which will
be responsible for the construction of worksheds (either directly or under their
supervision) and Khadi and Village Industries Commission (KVIC) will supervise the
activities.

Cost of land will not be part of the project cost. Financial assistance will be for the
purpose of construction of workshed only and will not be used to purchase land. In case
of individual beneficiaries, the right title of the land must vest with the beneficiary and
the institution has to ensure this before release of assistance. It will be the
responsibility of the institution to whom the selected beneficiaries are attached to take
care of the maintenance of the worksheds.

Wherever feasible, financial assistance may be provided to a group of (minimum

5, subject to a maximum of 15) khadi artisans who individually fulfill the eligibility
criteria for this scheme, for the construction of Group Worksheds. These Group
worksheds can be constructed in the land owned by the Khadi institution. In case of
these Group Worksheds, the area will be at least 15 sq.m. per beneficiary of the group
and the financial assistance to be provided by the Government will be limited to
Rs.15,000 per beneficiary of the group or 75% of the total cost of the project,
whichever is lower. This land will be leased out to the individual beneficiaries (in the
group) for an initial period of ten years, which may be extended after reviewing the
requirements, after the period.

MODALITIES FOR IMPLEMENTATION OF THE SCHEME

KVIC will ensure the minimum acceptable standards for the construction of
worksheds, and identify and select the khadi institutions that will implement the
scheme after ensuring that at least 50 per cent of the selected institutions are in those
States which contribute maximum khadi production or have the largest number of
spinners and weavers registered.
 The selected institutions will submit the list of beneficiaries (spinners and
weavers), who will be provided with the financial assistance for construction of
worksheds, to KVIC through the KVIC State Director concerned. The list will be
accompanied with a proposal containing the details of the extent and nature of
workshed and the cost estimates which should correspond to either the CPWD rates or
the State PWD rates, whichever are lower. The proposal should also clearly indicate the
extent of financing that would be contributed by the Khadi institutions either from their
own funds or raised through financial institutions / banks, Artisans Welfare Fund Trust
etc.

KVIC will examine the proposal and with the concurrence of its finance wing, will
release 50 per cent of the entitled financial assistance under the scheme to each khadi
institution as first installment after satisfying themselves that the contribution from the
institutions has been received for the project in respect of each beneficiary. The
financial assistance so released will be kept apart in a joint bank account operated by
the institution and KVIC for the purpose and it would not be allowed to be mixed with
the other funds of the khadi institution. On satisfactory completion of the construction
of the workshed (up to a level as prescribed by KVIC separately), the balance 50 per
cent of the entitled financial assistance can be released by KVIC to the institution. The
completion of the work would have to be certified by the State Director of KVIC.
Utilization Certificate in the prescribed format should be furnished by KVIC to the
Ministry along with the demand for release of funds.

The scheme will be got evaluated by KVIC through an independent reputed

agency after three years of its commencement. Comments and recommendations
should be forwarded to the Ministry before considering further release of funds in the
fourth year.

KVIC will ensure that the funds are earmarked as provided in the scheme for
utilization by and sanction to the beneficiaries belonging to Scheduled Castes
(minimum 15 per cent), Scheduled Tribes (minimum 8.2 per cent), Minorities and
women (minimum 30 per cent) and North Eastern Region (minimum 10 per cent) and
these are released to institutions by obtaining full details from the implementing
institutions along with a certification by the State Director concerned.

The khadi institution will be directly responsible for ensuring full, proper and
effective utilization of the financial assistance provided under the scheme for the
benefit of the spinners and weavers and will give an assurance to KVIC that they would
be responsible for any deviation or diversion or misuse of the financial assistance.

KVIC will verify the construction in all cases and indicate the same in the
quarterly progress report, to be submitted to the Ministry. KVIC will also maintain the
database of all the details of beneficiaries and construction activities, which will be
reviewed by KVIC every quarter.

KVI Boards of State/Union Territories

Sr

Name
Address
Phone
Fax,Email & Website
address (if any)
1
Andhra Pradesh KVI Board
Grama Parishramala Bhavanam, No.10-4-2, Humayun Nagar,
Hyderabad - 500 028
23450508
23319272
(040) 2339 7353
(040) 2345 0456
apkvib@ap.nic.in
apkvib@yahoo.com
www.apkvib.gov.in
2
Andman and Nicobar Islands KVI Board
Udyog Parisar, Middle Point, Port Blair - 744 101
233345
232395
(03192) 230499
(03192) 244201
dirind@and.nic.in
secedn@sec.and.nic.in
3
Arunachal Pradesh KVI Board
Udyog Sadan, Ground Floor, Itanagar - 791 111
2215467
2212776
(0360) 2211815
(0360) 2214114
dsaikia@gwl.dot.in
4
Assam KVI Board
Chandmari, Guwahati - 781 003
2664544
2664789
(0361) 2664789
5
Bihar KVI Board
Mahesh Bhavan,
Gandhi Maidan (East),
Patna - 800 004
2673725
2302414

(0612) 2302414
6
Chandigarh KVI Board
39,Industrial Area,Phase-II, Chandigarh - 160 002
2741142
2652118
(0172) 2741461
7
Chhattisgarh KVI Board
Near City Station, Jeevan Bima Marg, Pandari, Raipur-492001
2212846
2221204
(0771) 2426707
8
Delhi KVI Board
Old ITI Building 1,Canning Lane, Kasturba Gandhi Marg, New Delhi - 110 001
23782336
23381951
(011) 23384510
(011) 23782321
dkvib@ndf.vsnl.net.in
http://dkvib.delhigovt.nic.in
9
Goa,Daman and Diu KVI Board
Janta House,2nd Lift,2nd Floor Panaji, Goa - 403 001
2221410
2221452
(0832) 2222494
10
Gujarat KVI Board
Gram Nirman Bhavan, Juna Wadaj, Ahmedabad - 380 013
27556343
27559898
(079) 27557444
11
Himachal Pradesh KVI Board
Cleave Land, Choura Madan, Shimla - 171 004
2802724
2652407
(0177) 2802724
12
Haryana KVI Board
SCO No.841, Kalka Road NAC, Manimajra,
Chandigarh - 160 101
2730530
2733270
(0172) 2736561
hkvib841@yahoo.com
http://harkhadi.nic.in
13
Jammu and Kashmir KVI Board
Old Secretariat,
Srinagar - 190 001
Old Secretariat,
Jammutawi -180 001
0194-2452940
0194-2452941
0194-2455178
0191-2562960
0191-2565244
0191-2542187
(0194) 2474789
(0191) 2548478
14
Karnataka KVI Board
10,Jasma Bhavan Road, Bangalore - 560 052
22266852
(080) 22258531
15
Kerala KVI Board
"Gramasoubhagya", Court Compound, Vanchiyoor,
Thiruvananthapuram
- 695 035
2327574
2462183
(0471) 2479525
vckhadi@keralakhadi.org
www.keralakhadi.org
16
Lakshadweep KVI Board
Kavaratti Island - 682555
263394
262396
(04896) 263394
17
Madhya Pradesh KVI Board
74, Area Hills, Near Kendriya Vidyalaya, Bhopal - 462 011
5221619
2553448
(0755) 2553246
mdmpkvib@sancharnet.in
18
Maharashtra KVI Board
9/12,Manohardas Street, Bhatia Balrakshak Vidyalaya, Fort, Mumbai - 400 001
22694417
22696720
(022) 22696808
mskvib@bom8.vsnl.net.in
19
Manipur KVI Board
North to District Collector Office, Lamphelpat, Imphal(W) - 795 004
2222145
2414569
(0385) 2414569
20
Meghalaya KVI Board
Lower Lachumiere, Temple Road, Shillong - 793 001
2227559
2225563
(0364) 2225563
21
Mizoram KVI Board
Dr. Jairema Building, Zarkawt, Aizwal, Mizoram - 796 001
2342625
2342460
(0389) 2347587
ceo@mizokvib.org
www.mizokvib.com
22
Nagaland KVI Board
Near New Secretariate Complex, Kohima - 797 001
2270011
2270013
(0370) 2270013
23
Orissa KVI Board
Kharvela Nagar, Unit - III, Bhubaneswar - 751 001
2501862
(0674) 2503552
24
Punjab KVI Board
SCO.No.2428-30.Sector - 22-C Chandigarh - 160 022
2701026
2705177
(0172) 2705177
25
Pondicherry KVI Board
Plot No. 1-2,Kamaraj Salaj, New Saram,
Pondicherry - 605 013
2241570
2241708
(0413) 2241570
(0413) 2241708
26
Rajasthan KVI Board
Jawaharlal Nehru Marg, Near Telephone Exchange, Bajaj Nagar Circle, Jaipur - 302 017
2705935
2705197
2705198
(0141) 2706510
27
Sikkim KVI Board
Deorali, Gangtok, East
Sikkim - 737 102
280944
(03592) 280944
28
Tamil Nadu KVI Board
Kuralagam, 5th Floor,
Chennai - 600 108
25674020
25340556
(044) 25340481
khadi@giasmdol.vsnl.net.in

29
Tripura KVI Board
Colonel Chowmuhani, Dist. Tirupa (West), P.O. Agartala - 799 001
2224638
2223386
(0381) 2223386
30
Uttar Pradesh KVI Board
Gramodyog Bhavan, 8, Tilak Marg, Lucknow - 226 001
2238071
2208321
(0522) 2208243
www.upkvib.com
31
Uttaranchal KVI Boad
21/9, E.C. Road, Dehradun - 248 001
2666377
2714971
(0135) 2666380
(0135) 2712914