DEVELOPMENT OF COTTAGE INDUSTRY

The Ministry of Micro, Small and Medium Enterprises (MSME) during 2008-09 and 2009-10 has approved the following six new schemes for development and promotion of the khadi and village industries sector through the Khadi and Village Industries Commission (KVIC) for implementation:-

“Prime Minister’s Employment Generation Programme (PMEGP)” for creation of additional employment opportunities through establishment of micro enterprises. The Scheme is being implemented through the KVIC as the single nodal agency at the national level. At the State/Union Territories level, the scheme is implemented through field offices of KVIC, State/Union Territory Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) with the involvement of Banks. Under this Programme, entrepreneurs can establish village industries, by availing margin money assistance from the KVIC / KVIBs of States & Union Territories/ DICs and loans from implementing public sector scheduled commercial Banks, selected regional rural Banks and co-operative Banks, etc., for projects with a maximum cost of Rs. 10 lakh each in the service/business sector and up to Rs.25 lakh each in the manufacturing sector.

(ii) Scheme for “Enhancing Productivity and Competitiveness of Khadi Industry and Artisans” with the objective, inter alia, 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.

(iii) Workshed Scheme for Khadi Artisans to provide financial assistance exclusively to khadi spinners and weavers belonging to below poverty line (BPL) category for construction of worksheds.

(iv) Scheme for Strengthening of Infrastructure of Existing weak Khadi Institutions and Assistance for Marketing Infrastructure’ to assist identified weak khadi institutions so as to enable those institutions regain their status and revive their potential for reemployment, and improving marketing of khadi products through development of marketing infrastructure, including renovation of selected sales outlets of khadi institutions, on a limited basis.

(v) Market Development Assistance (MDA) Scheme on production of khadi for implementation with effect from 01.04.2010 by KVIC during 2010-11 and 2011-12, which envisages financial assistance @ 20% of production value on khadi and polyvastra which will be shared among artisans, producing institutions and selling institutions in the ratio 25:30:45. Under the new system of MDA, sales are expected to be evenly spread throughout the year, the institutions will have the flexibility to use the assistance in improving the outlets, products, giving incentive to customers, etc.

(vi) Khadi Reforms and Development Programme funded by the Asian DeveloBank with provision for setting up of a marketing organization through private participation, including market development like market survey, design inputs, brand building, khadi mark, promotion, etc., opening of 20 new sales outlets in metropolitan cities and State Capitals and renovation and modernization of around 1200 sales outlets.

The details of targets set by KVIC for these six schemes for year 2010-11, are :-

Name of the Scheme Budget Allocation Target
PMEGP Rs.906 crore Generation of additional employment opportunities for 5.97 lakh persons
Workshed Scheme for Khadi Artisans Rs.20 crore 8000 artisans would be covered during 2010-11.
Scheme for Enhancing Productivity and Competitiveness of Khadi Industry and Artisans. Rs.21 crore 60 projects are proposed for 2010-11.
Scheme for Strengthening of Infrastructure of Existing weak Khadi Institutions and Assistance for Marketing Infrastructure Rs.5 crore Assisting around 30 identified weak khadi institutions and development of marketing infrastructure, including renovation of 10 selected sales outlets.
MDA Scheme on Production of Khadi and Polyvastra Rs.159 crore All the eligible institutions engaged in production and marketing of khadi are proposed to extended MDA assistance.
Khadi Reforms and Development Programme Rs.192 crore 50 selected khadi institutions are proposed to be extended assistance so as to become self reliant.
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