The Central Government
had constituted the following Committees to review the existing structure,
functioning and performance of Khadi Village and Industries Commission(KVIC) to
study the regulatory framework and to recommend any other measures considered necessary
to revamp the KVIC.
1.
High
Power Committee headed by late Prime Minister Shri PV Narasimha Rao
2.
Arthur Andersen Study
3.
Expert
Committee under the Chairmanship of Shri. D.M. Sukthankar, former Chief
Secretary Govt. of Maharashtra
High Power Committee
(HPC) was constituted under the Chairmanship of late
Prime Minister Mr. P. V. Narasimha Rao to review the performance, examine the
issues and identify the problems faced by the KVI sector.
The Committee in its
report submitted in 1994 made various recommendations. The key recommendations
of the Committee were:
●
All
apex financing Institutions and commercial banks to be advised to increase the
flow of institutional credit to the KVI sector.
●
Rebate
for Khadi may be replaced by ‘Market Development Assistance’ (MDA), calculated
at 20% of production
●
Necessary
legislative measures to protect “Khadi” and its use by KVIC certified
Institutions;
●
Separate
wing in KVIC to supervise the working of Sliver Plants; smaller economical
sliver plants to be set up at the Institutional level
●
Village
industries under the purview of KVIC to be considered on par with Government
level village and small industries category for planning and development
purposes.
●
Government
to constitute a separate fund (Rs. 2000 crore) for rural industries to be
administered by NABARD or a separate financial institution.
●
Focus
on select industries for development where KVIC has expertise and experience
●
Development
of the export capability of KVI Institutions; strengthening quality control,
augmenting training (participatory funding scheme for KVIB and NGO run new
training centres) and research facilities
●
Creation
of a special cell at the KVIC headquarters to oversee and monitor the KVI
programmes
●
Transition
to Project Approach for financing (from Pattern Approach)
●
Commission
to delegate day to day functions to the CEO and Financial Advisor and focus on
developmental rather than regulatory activity
●
Measures
for strengthening of KVIBs
Based on the
recommendations of the High Power Committee the following changes were brought
in the KVI Sector:
The
REGP scheme was commissioned in 1995-96 with the objective of providing a
formal channel for flow of funds from banking institutions to the KVI sector.
The
Government of India framed a new scheme for KVIC to take online credit facility
(Consortium of Bank Credit or “CBC”) of Rs. 1000 crore.
Arthur
Andersen study was commissioned in the year 2000 with the
objective of reorganizing the KVIC organization structure with respect to the
changing business needs and overall objectives of the KVIC.
The Committee in its
report made various recommendations. The key recommendations of the Committee
were:
●
Redefinition
of “Commission” under the KVIC act, 1956 in line with change from an
operational body to policy formulation body.
●
At
the Commission level, the KVIC to not only comprise representatives of the KVI
sector but the officers of the KVIC to also participate in its policy making
and, therefore, the CEO, FA and the heads of Khadi and VI departments to be
appointed as voting members of the Commission.
●
At
the operational level, KVIC to structure itself into separate business units to
meet the distinct requirements of Khadi and Village Industries.
●
The
roles and responsibilities of internal functions, such as Capacity Building,
Marketing & Sales, Research & Development, Human Resources, Finance,
etc, which are integral to the organization’s performance, to be defined and
communicated clearly.
●
KVIC
should set up industrial clusters catering to a groups of skilled artisans at
the district/block level
Based
on the recommendations of the Arthur Andersen study the
CEO and FA were made ex-officio members of the Commission and voting rights
were also conferred.
Ministry
constituted Expert Committee under the Chairmanship of Mr. D.M. Sukthankar,
former Chief Secretary Govt. of Maharashtra, in 2005 to review the existing
structure, functioning and performance of KVIC to study the regulatory
framework and to recommend any other measures considered necessary to revamp
the KVIC.
The Committee in its
report submitted in March, 2005 made various recommendations. The key
recommendations of the Committee were:
●
Need
for identification of select traditional and sunrise industries as focus areas;
a cluster-based approach to revival of traditional industries;
●
Recognize
technological up-gradation and modernization as a priority area for
transforming the sector; suggested mobilization of existing technical and
scientific Institutions, such as, ITIs, Engineering Colleges, IITs, CSIR as
resource/contact Institutions for rural industrialization and creation of
venture capital fund within KVI;
●
Recommended
brand building, standardization and quality control for products of KVI Sector;
●
Address
the organizational and training issues preventing the growth of the KVI sector
and suggested setting up of Zonal Committees and Zonal offices under a Deputy
CEO, and restructuring of training programme aimed towards entrepreneurial
development;
●
Commented
on issues related to Khadi Institutions, namely, dues on account of Rebate,
stock pile-up and state of implements; Suggested alternatives to Rebate
○
direct
subsidization of spinners
○
encouraging
entrepreneurship among spinners/weavers through formation of Self Help Groups
●
Governance
related recommendations
Based on the
recommendations of the Expert Committee the following changes were brought in
the KVI Sector:
·
Introduced Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
to organize the traditional industries and artisans into clusters to make them
competitive and provide support for their long term sustainability and economy
of scale.
·
KVIC took up several projects under an interface with reputed Technological
institutions viz. IITs and NITs for developing new technologies and their
subsequent dissemination among institutions and entrepreneurs of KVI Sector.
KVIC
have introduced ‘Khadi Mark’ to ensure genuineness of Khadi to the customers.
Zonal
Committees have been constituted for each of six geographical zones to monitor
timely implementation of KVI programmes/schemes for the development of Khadi
and Village Industries in the zone.
The
Ministry of MSME has revised the negative list and brought in a large number of
new industries/projects like spinning and weaving, solar charkhas hand
loom/power looms under the ambit of Prime Minister’s Employment Generation
Programme (PMEGP).
Government
of India introduced the scheme of Market Development Assistance (MDA) on
Production in place of rebate after experimenting with several pilot schemes.
The scheme has been given effect from 1st April 2010, to help Khadi
institutions to reorient their activities extending adequate emphasis towards
increasing artisans' earnings as well as ensuring quality of Khadi to
customers. Under MDA scheme 25% of assistance is earmarked for payment among
spinners and weavers as additional incentive through their bank/post office
account.
An
online application system has been made operational for disbursement of Market
Development Assistance (MDA) and Interest Subsidy under ISEC scheme to KIs and
artisans as applicable.
Under PMEGP, online
disbursement of MM subsidy through single National level nodal bank has been
developed.
This Press Release is
based on information given by the Minister of State for MSME Shri Giriraj Singh
in a written reply to a question in Lok Sabha on 10.04.2017 (Monday).
********
AK/RM