In this article we will discuss about the role of Khadi and Village Industries Commission (KVIC) in Indian economy.

The Khadi and Village Industries Commission (KVIC) is playing an important role in Indian economy as it covers about 2.48 lakh villages throughout the country. Over the years, the main thrust of KVI activities has been to provide a larger share of employment to scheduled caste and scheduled tribes and women. At present SC/STs comprise nearly 32.0 per cent of workers and women constitute 46 per cent of the work force. In 1992-93, the Khadi and Village industries produced goods worth Rs 270.49 crore and provided employment to 51.05 lakh persons. During 1993-94 the production level increased to Rs 3,490.0 crore and provides employment to 55.50 lakh persons.

An Action Plan incorporating the major recommendations of High Powered Committee has been formulated and launched on October 2, 1994. With the implementation of the Action Plan the sector will get a boost with a quantum jump in production and employment.

The KVIC attained a growth rate of 12 per cent in its overall production in 1996-97 as the value of its production has reached the level of Rs 4,516.26 crore during the year as compared to Rs 4,026.45 crore in 1995- 96. Commensurate with the increased production, sales also improved to Rs 4,014.11 crore as compared to Rs 4,429.12 crore in 1995-96. In 1997-98, the value of output of KVI has increased marginally to Rs 4,519.31 crore.


Total number of persons employed in KVI has increased from 56.72 lakh in 1995-96 to 58.17 lakh in 1996-97 registering an increase of 3 per cent and then it declined to 56.50 lakh in 1997-98. The per capita productivity of KVI improved to Rs 7,898 during 1996-97 as compared to Rs 7,099 in 1995-96 while the per capita earning increased to Rs 2,635 as against Rs 2,405 in 1995-96. The khadi and village industries have spread and taken root in about 2.50 lakh villages in 1997-98 out of total 5.81 lakh villages in the country.

The khadi programme consists of production of cotton, silk, muslin and woollen and village industries consisting of 111 industries and implemented through directly aided agencies and State/UT level Khadi and Village Industries Board.

KVIC would be providing additional employment to the level of 10.57 lakh unemployed persons in the rural areas with an estimated cost of Rs 5,600 crore during the Ninth Five Year Plan (1997-2002).

In recent years, KVIC has witnessed vast changes resulting from the introduction of new schemes and systems. However, the recessionary trends in the economy in general also reflected in this sector to a certain extent. The KVIC has formulated a scheme for financing projects with investment items up to Rs 25 lakh for rural industrialisation and employment generation. Under the scheme 25 per cent of the project cost upto Rs 10 lakh is being provided as margin money by way of subsidy.


For projects above Rs 10 lakh and upto Rs 25 lakh, the rate of margin money will be 25 per cent of Rs 10 lakh plus 10 per cent of the remaining cost of the project. In the case of beneficiaries of the weaker sections, tribal areas and backward regions, the margin money will be at the rate of 30 per cent of the project cost. The technologies and projects to be adopted by KVIC would he mainly directed towards increasing employment opportunities as well as productivity of artisans.

The government has also launched a new scheme in 125 blocks of the country for intensive development of khadi and village industry. The objective of this programme is to create about 1,000 additional jobs in each block during the period of next three years.

The Khadi and Village Industries Commission (KVIC) has been playing an important role as an instrument to generate large scale employment in the rural areas with low per capita investment. The Government will continue to encourage the khadi and village industry sector so that its products can become more competitive, For intensifying marketing efforts, the Budget 2000-01 proposed that the KVIC will introduce a common brand name for its products and also set up a professionally managed marketing company for domestic as well as export marketing.

KVIC has also launched a massive marketing development plan throughout the country so as to generate interest, awareness and attraction amongst the masses about the khadi and village industries products. Accordingly, KVIC has approved a number of schemes in order to promote marketing of the products of village industries and also to offer employment opportunities to unemployed under Rural Employment Generation Programmes.


The MSME Ministry is also implementing a comprehensive reform package for the Khadi sector. This envisages upgradation and capacity building of 300 Khadi institutions and also for improving their marketing skills. Under the package, steps are being taken to distribute 1 lakh modern charkhas to artisans and also new handlooms to various Khadi Sansthans.

Seventy nine clusters have been sanctioned under the Scheme of Fund for Regeneration of Traditional Industries (SFRUTI). Presently KVIC is functioning under the administrative control of the Ministry of MSME. KVIC has been identified as one of the major organizations in the decentralized sector for generating sustainable non- farm employment opportunities in rural areas at a low per capita investment.

It undertakes activities like skill improvement, transfer of technology, research and development, marketing etc. and also helps in generating employment self employment opportunities in rural areas.

The main objectives of KVIC include:

(i) The social objectives or providing employment in rural areas;

(ii) The economic objectives of producing saleable articles, and

(iii) The wider objective of creating self-reliance amongst people and building up a strong rural community spirit.

In order to attract younger generation, the KVIC is holding exhibitions, seminars, lectures in over 120 universities and colleges throughout the country so as to disseminate knowledge of KVI products.

To face the challenge of globalisation. KVIC has introduced a number of new products range like Khadi denim jeans, Sarvodaya brand for export purpose. The KVIC is also training its sales staff in order to attune them to the new market-context being created by globalisation. For ensuring quality for KVI products, the commission is approaching the Bureau of Indian Standards and Directorate of Marketing and Inspection of Ministry of Agriculture.


Moreover, to create a market-niche for eco-friendly pure and bio-degradable natural products, the KVIC has introduced two new brands viz., “Sarvodaya” and “Khadi”. The KVIC has decided to participate actively in international trade exhibitions being organised by ITPO, with the primary objective of popularising its products in international markets.

The KVIC has worked out a plan to supply KVI products in a big way to Central and State Government organisations. Plans are afoot to set up show windows in Indian Missions abroad as well as to open Khadi Gramodyog Bhawans in Australia, Germany, U.K., U.S.A., Canada, Dubai and Singapore.