TheGovernmentispromoting

villageindustriesTheKhadiand .~. ~

VillageIndustries 1 ,

__' ~. .

.

.. .Commission(KYIC) \

hasdevisedqualityassurancenorms.

Theseincludestandardparameters

lor cononlibre,normslor yam,

clothandlast colour

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VIRBHADRA SINGH

Hon'ble Minister, MSME

What incentives are being given to exporters?The government has taken a number of steps to promote exportsof Khadi and Village Industries (KVI) products. These includeincentives to KVI institutions on direct export of KVI items at 5per cent of the Free-on-Board (FOB)value to a maximum limit ofno lakh and providing support through Khadi and VillageIndustries Commission (KVIC), which has deemed ExportPromotion Council (EPC) status.

Do eco-friendly products of traditional industries have aproduction and export growth potential?Khadi and other village industries products are eco-friendly.Several KVI items are being introduced in the global market. Thegovernment has undertaken steps to strengthen traditionalindustries like khadi, village and coiroMany initiatives have beentaken like the Scheme of Fund for Regeneration of Traditionalindustries (SFURTI), strengthening infrastructure of the existingweak khadi institutions and assistance for marketinginfrastructure. The Workshed Scheme for khadi artisans and

Khadi Karigar Janashree Bima Yojana have been set up. Besidesthe KVIC has implemented a comprehensive Khadi Reform andDevelopment Programme. The Coir Board has implementedplans of rejuvenation, modernisation and technologicalupgradation of the coir industry.How much employment does KVIC generate in the ruralareas?

Employment for an estimated 113.80 lakh people has beengenerated under KVI sector as on March 31, 2011.How does KVIC ensure purity of khadi?Khadi-producing institutions follow the parameters for qualityfIxed by KVIC to ensure uniform quality. These include standardparameters for cotton fIbre as well as norms for yarn, cloth andcolour fastness properties. Besides these, the methods andequipment used for testing quality are implemented.

The Government, through KVIC, has initiated acomprehensive Khadi Reform and Development Programme,inter alia, to assure the purity ofkhadi to the end user. Under this,it is envisaging the introduction of "Khadi Mark" for positioningthe fabric as a guaranteed hand-spun and hand-woven cloth.

\

r

Khadiisthetextileofthefuture

~Theloomusedinweavingmakesthe

textileporous,soothingandthemost

comlortabletowear.Itsdesignisbeing

improveduponincollaborationwith

premierinstitutionslikeNIDandNI" RADHA KRISHNA MATHUR

Secretary, MSME

Though interest in khadi is growing, a majority of peoplestill find it old-fashioned. How do you plan to make thefabric more attractive?

Khadi is considered a breathing textile. It is a hand-spun andhand-woven cloth and, therefore, very comfortable to wear.This is because the loom used in the weaving of khadiinterlaces the threads in a manner that maximum air

permeates the body and soothes it more than any otherfabric. In fact, khadi is the textile of the future. Its design isbeing improved upon in collaboration with premierinstitutions like the National Institute of Design (NID) andNational Institute of Fashion Technology (NIFT).What steps is KYIC taking towards the welfare of artisans?A group insurance schC!ll1ecalled the Khadi KarigarJanashree Bima Yojana (JBY) was launched on August 15,2003. It was formulated by Khadi and Village IndustriesCommission (KVIC)' in association with the Life Insurance

Corporation ofIndia (LIC) with the annj.lalpremium oH200per benefIciary.Who are your target beneficiaries in the SFURTI scheme?The Ministry of Micro, Small and Medium Enterprises hasbeen implementing the cluster-based scheme named Schemeof Fund for Regeneration of Traditional Industries (SFURTI)since 2005-06 through the KVIC and Coir Board. UnderSFURTI, 29 khadi industries, 50 village industries and 26coir clusters with more than 500 traditional artisans percluster, have been targetted.Tell us about the reforms you are planning to undertake.The Government has launched the Khadi Reform and

Development Programme (KRDP) which aims atrevitalising the khadi sector with enhanced sustain ability.Market development activities like market survey, designinputs, brand building, "Khadi Mark" promotion,development of clusters in fIve traditional village industries,opening of new sales outlets in metropolitan cities and statecapitals and renovation and modernisation of institutionalsales outlets are proposed to be carried out under the

.}

programme.

RAlLBANDHU I 96 IJANUARY 2012

GolandKVICshouldworktogetherWe areworkingtowards

thebeUerment01artisans.Theirliving

condillonsneedimprovemenl.Theirsalarieswill seean

increaseduringIhe 12thFive-YearPlan.Wewill L.. . ..

helpthemsavemoreDEVENDRAKUM"'~p~~~

You are known as a senior Gandhian. Also, you areattached with Khadi and Village Industries Commission(KYle). Tell us about yours views, dreams and role inthis programme?Today, village industries are affected by the market. Onlyindustries that are capable of overcoming market hurdleswill survive in the field. The norm applies to KYICprogrammes as well. The Government of India hasreceived monetary help from the Asian DevelopmentBank to help boost village industries. Khadi will getfinancial support from the Government. We are lookingforward to capture a larger market. To achieve this, wewill take the Private Public Partnership (PPP) initiative,sIJthat we are able to sell our products on a large scale. Weare working out strategies to increase the number ofmarketing centres and sales outlets. We will makedifferent products for the domestic and internationalmarkets.

Which three fields are you planning to focus on so thatKYlC programmes run smoothly?We have to be very careful while promoting khadi.Therefore, KYIC and the Government of India need to

work in coordination. We have to follow a "give and take"policy. We will improve our service and the quality ofproducts so that people can rely on khadi. Second, we areworking towards the betterment of artisans. Their workingand living conditions need improvement. We are adoptingthe latest production technologies and have a new vision formarketing. Last but not the least, our priority is to maintaintransparency.

Artisans are the strength of KVIC. What steps are beingtaken for their benefit?

Their salaries will see an increase during the 12th Five-YearPlan. We will help them save money and have already takena few steps in this direction. We have to keep in mind thebasic aim of KYIC. We have started the Janashree Rima

Yojna for our workers and are planning to provide artisanshealth insurance. These steps will definitely help them workbetter and KYIC can cover various milestones towardsexcellence.

KVICoutletswillbemademorevibrant

OurproductscantakeonthequalilV

challengeposedbvInlernallonalbrands.

Eco-frlendlvandhand-madeIlems

will withstandstincompetition

]1~I!~Mem .v.C.~AAMI$sloner.IlVI~

KVIC deals with employment opportunities for artisans andcraftsmen in rural areas. Has it been successful in this direction?

Through its vast network, KYlC has reached every nook and cornerof the country and created employment opportunities. It has beensuccessful in providing employment to 113.80lakh people as on date2010-11 through various schemes.Khadi Bhandars need to come up with more strategies to competewith malls and supermarkets. What steps is KYlC taking tomarket products in a better way?KYIC is aware of the present market scenario and has taken severalsteps in planning and marketing products. For this, Khadi Plaza andKhadi Haat are proposed. We intend to create franchisee formarketing products through reputed stores, including malls andsupermarkets.How has KYlC helped generate employmen~usters and developmicro enterprises?In the last three years, KYlC has achieved milestones of 1.15 lakhmicro enterprises throughout the country, providing employmentopportunities to 11.57 lakh people under the Prime MinisterEmployment Generation Programme (PMEGP). Under SFURTI(Scheme of Fund for Regeneration of Traditional Industries), 76clusters are in operation all over the country and doing well.What efforts has KYlC taken in promoting eco-frlendly and hand-made products?Producing units are being encouraged to participate in domesticexhibitions and international trade fairs. Buyer-seller meets are beingorganised abroad for which KYIC is extending financial and otherpolicy support. There is a scheme of providing five per cent exportincentives to units engaged in direct export of KYI products.Foreign Direct Investment (FDI) in retail will bring majorinternational players into the country. How is KVIC bracing forthe challenge?KYIC products can face the quality challenge posed by internationalbrands. Marketing Organisations (MO), as proposed in the KhadiReform Development Programme under the ADB-assisted project,will provide a platform to existing KYIC manufacturers at salesoutlets, which will be able to compete with any product in terms ofquality, price and appeal alongside foreign brands. Eco-friendly andhand-made products will with~tand the onslaught of multinationalagencies/products.

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RAlLBANDHU I 97 JANUARY 2012

Khadi connotes the beginning of economicfreedom and equality for all in the country. Itmust be taken with all its implications. It meansa wholesale swadeshi mentality, a determinationto find all the necessities of life in India, and thattoo, through the labour and intellect of villages

- Mahatma Gandhi

KVICHELPSGLAMORISEOUR

TRADITIONALFABRICahatma Gandhi started

MKhadi and VillageIndustries to rejuvenatethe rural economy aspart of the freedom

struggle. The All India Spinners'Association was established in 1925 and

All India Village Industries Association in1934. Post -Independence, theGovernment committed itself to the

development of the rural sector throughKhadi and Village Industries. In 1953, theAll India Khadi and Village IndustriesBoard w.as set up under the Ministry ofCommerce. Subsequently, in order toensure autonomy in its functioning, theKhadi and Village Industries Act waspassed in the Parliament in 1956 and theKhadi and Village Industries Commission(KVIC) was born in 1957 with its

headquarters in Mumbai. KVIC functionsunder the administrative control of the

Ministry of Micro, Small and MediumEnterprises, Government of India.

The prime objective of KYIC is toprovide employment in rural areasthrough production of saleable articles. Inthe process, it creates self-reliance amongpeople and builds a strong ruralcommunity spirit.

To achieve its objective, KVIC isentrusted with the functions of planning,

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promotion, organisation andimplementation of programmes for thedevelopment of khadi and other villageindustries in rural areas in coordination

with other agencies engaged in ruraldevelopment. For more than five decades,KVIC has created a network ofzonal/state/divisional offices besides

having the support of all the State Khadiand Village Industries Boards (KVIB)

established by the respective stategovernments.

The purity of khadi is ensured by itsbasic nature of being hand-spun andhand-woven. The spinning and weavingprocess creates opportunities foremployment to a large number oftraditional spinners and weavers withinthe precincts of their homes. More than 80per cent of them are women.

RAlLBANDHUI98 JANUARY2012

KVIC has been promoting the use oforganic cotton and natural dyes. It dealswith traditional rural industries such as

pottery, leather, hand-made paper,non-edible oils and soaps, processingof cereals and pulses. The ambit ofvillage industries has been expandedto cover any production activity(except a few which are listed asnegative activities that deal with liquor,tobacco, meat and environmentallyhazardous products) as well as serviceactivities under the scheme of Prime

Minister Employment GenerationProgramme (PMEGP).

PMEGP was launched in September2008 by merging the earlier prevailingRural Employment GenerationProgramme (REGP) and Prime Minister'sRozgar Yojana (PMRY). PMEGP is themost attractive scheme with the rate of

subsidy ranging from 15 to 35 per centdepending upon the location and thecategory of the beneficiaries. All microprojects up to ~25 lakh for manufacturingactivities and up to no lakh for serviceactivities, could be covered under thisscheme. Whereas KVIC and KVIB

continue to promote the scheme in ruralareas, the District Industries Centre works

under the state government and is beingimplemented in rural as well as urbanareas. During the last three years, morethan 1.15 lakh projects have been set upunder PMEGP providing employmentopportunities to around 1.3 millionpeople.

At present, every year 50,000 to 60,000units are being set up, thereby generatingemployment opportunities for around fivelakh people every year.

With khadi as well as village industriesunder PMEGP, KVIC has been able to

'create huge opportunities for sales ofU5,792.99 crore besides a total

IIemployment generation of around 113.80people as on 31.3.2010.

Due to the rigorous efforts of KVIC,khadi, which was seen as a cloth worn bythe poor, has become glamorous. Withgrowing awareness about natural hand-made products, khadi has cut across classto find favour among all age and incomegroups. It has become very popular withhaute couture. Indian designers like RajeshPratap Singh, Payal Jain, James Ferreira

KHADI, WHICH WASSEENAS A CLOTH

WORN BY THE POOR,HAS BECOME QUITEGLAMOROUS. WITH

THE GROWINGAWARENESS ABOUT

NATURAL ANDHAND-MADE

PRODUCTS, IT HASCUT ACROSS CLASS,

AGE AND INCOMEGROUPS

;~,j1..:::1 and Ritu Kumar have, mad! the traditional

fabric part of their collection.To meet the market demands

and the taste of all classes within and

outside the country, KYIC has embarkedupon various initiatives. One of these iscluster development. During the lIthFive-YearPlan, ending March 31, 2012, theKYIC adopted a cluster approach to rollout a scheme for granting funds tocarefully selected clusters for regenerationof village industries. The ~65 crore S~hemeof Fund for Regeneration of TraditionalIndustries (SFURTI) has seen financial

assistance and technical support beingprovided to 29 khadi and 50 villageindustries clusters, benefitting around50,000 artisans and craftsmen.

In the Gorakhpur cluster, 550 artisanswere provided new charkhas underSFURTI. The NIFT design interventionand technical support from theEntrepreneurship Development Instituteof India, Ahmedabad, has led to annual

sales rising from ~70 lakh to ~2.5 croreand the earlier loss-making institution

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RAlLBANDHU 99 JANUARY2012 ill J

I;/l

started earning profits in a period ofthree years.

For cluster development, KVICprovides ~15 lakh per cluster forrenovation of sales outlets, compute risingaccounts, getting ISO certification,designing a website, training people incolouring, designing, stitching, productfinishing and packaging.

One of the management consultingagencies, which was engaged forindependent evaluation of SFURTIprogramme, has appreciated its success.

The offshoot of SFURTI is the

tremendous increase in the productrange. In many regions, KVIC units arelooking at innovations in marketing tochart better growth and reach.

In fact, one of the KVIC units in

Meghalaya has engaged services of anMBA graduate for marketing bambooproducts. Likewise, KVIC in Kerala hasmade ayurvedic products while Nagalandis gaining an edge in silk items underSFURTI.

Working on plans to create a globalkhadi brand, KVIC is engaged at variouslevels in product improvement,packaging, branding and salespromotion, holding fairs and exhibitionin India and overseas, arranging buyer-seller meets besides setting up a webportal to get global reach.

Pricing is another area where KVIChas managed to break free from a six-decade old practice of cost chartmechanism, which was fixed annually bystate committees. Under the old practice,production institutions had limited

options to leverage marketing and pricingaspects as the rebate system restricted thesale of khadi during a special rebateperiod of 108 days a year.

Based on the recommendations of

four high-powered committees - thefirst being headed by former PrimeMinister late Shri PV Narasimha Rao - a

Marketing Development Assistance

(MDA) scheme was introduced April 1,2010 onwards. The new system has freedthe producing institutions to improve thequality of products through infusion oftechnology and design, while allowingmore scope for sales and marketingpromotion.

Now institutions are free to fix the

product price based on value addition andmarket demand. In just one year, benefitsof the new system are distinctly visible inbetter product sales, higher sales marginand enhanced flow of funds to the

producing institutions. Due to improved.liquidity, khadi-producing institutions

RAILBANDHU I 100 JANUARY 2012

have better leverage in procurement ofraw materials, improvement in design andavailing funds from financial institutions.

For customers used to waiting for theannual rebate season, there are better dealsavailable from khadi institutions in terms

of product ~oices, varied designs andeven discounts through the year.

KVle's ambitions to increase

footprints all around have got a boostthrough a $150 million AsianDevelopment Bank funded KhadiReform Development Programme(KRDP). Under the three-year ADBprogramme, which starte<,lin September2010, 300 khadi institutions will be

provided n.19 crore each to undertakereforms at all levels. Under the guidanceof global consultants,' KVIC hasembarked on an ambitious plan to changethe way its products are viewed.

In the offing are plans to set up 20khadi plazas with an investment of nocrore each within next two years underthe Public-Private Partnership (PPP)mode. It will be the responsibility of theprivate partner to channelise the khadibrand, boost design sales network withinthe country and help complete thetransformation of the khadi sector under

the overall guidance of the Ministry ofMSME.