Khadi and Village Industries Commission (KVIC)

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The Khadi and Village Industries Commission (KVIC) is a statutory body that plan, promote, facilitate, organize and assist in the development of Khadi and Village Industries in the rural areas nationwide. The commission is considered to be one of the leading organizations under the Ministry of Micro, Small and Medium Enterprises.

The interest subsidy scheme shall be applicable to various loans offered by financial agencies. Loans raised by KVIC for disbursement as capital investment and working capital loans to:

  • Institutions: Registered under Societies Registration Act 1860
  • Co-operative Society: Registered under Co-operative Societies Act 1912
  • Charitable Trusts for public welfare and religious purposes
  • Financial Institutions: Scheduled and Non-scheduled banks, Nationalised Banks, Co-operative Banks, State Financial Corporations and Industrial Development Banks
Functions of KVIC:
Objectives of KVIC:
Schemes under Khadi and Village Industries Commission (KVIC)

Functions of KVIC:

  • Building up of a reserve raw materials and implements for supply to producers
  • Formation of common service facilities for processing of raw materials as semi-finished goods
  • Promoting the sale and marketing of Khadi and Village Industries products, as well as handicrafts
  • Promoting research in the village industries sector related production techniques and equipment
  • Providing financial assistance to individuals and institutions for the development and operation of Khadi and Village industries

Objectives of KVIC:

  • To provide employment
  • To produce saleable articles
  • To create self-reliance amongst the poor
  • To build up strong rural community

Schemes under Khadi and Village Industries Commission (KVIC)

Prime Minister’s Employment Generation Programme (PMEGP)

Prime Minister’s Employment Generation Programme (PMEGP) was launched in 2008 to replace The Rural Employment Generation Programme (REGP) scheme. Ministry of MSME launched PMEGP which is a credit linked subsidy program. The prime reason for launching this scheme is to create employment in rural and urban areas across the nation.

Under this scheme, the beneficiaries are required to invest their own contribution of certain percentage of the project cost. Mentioned below is a tabular representation of the amount required to be deposited by the beneficiaries:

Levels of Funding under PMEGP

Categories of beneficiaries under PMEGPBeneficiary’s contribution (of project cost)Rate of Subsidy (of project cost)
Area (location of project/unit)Urban/Rural
General Category10%15%/25%
Special (including SC / ST / OBC

/Minorities/Women, Ex-servicemen,

Physically handicapped, NER, Hill

and Border areas etc.

5%25%/35%

Note: The maximum cost of the project/unit admissible under manufacturing sector is Rs. 25 lakh.

The maximum cost of the project/unit admissible under business/service sector is Rs. 10 lakh.

The balance amount of the total project cost will be provided by Banks as term loan

Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

Launched in 2005, SFURTI is a Scheme of Fund for Regeneration of Traditional Industries Ministry of MSME. The primary objective of SFURTI is to promote Cluster development and KVIC is the nodal agency for the promotion of Cluster development for Khadi and Village Industries products.

Interest Subsidy Eligibility Certificate (ISEC)

The Interest Subsidy Eligibility Certificate (ISEC) Scheme is the major funding source for the Khadi programme. This scheme is applicable for all registered institutions of KVIC. This scheme was introduced to mobilize funds from banking institutions to bridge the gap in the actual fund requirement and its availability from budgetary sources.

Market Promotion Development Assistance (MPDA)

Market Promotion Development Assistance (MPDA): This scheme is launched by merging Market Development Assistance, Publicity, Marketing and Market Promotion. The aim of this scheme is to ensure increased earnings for artisans.

Under the former MDA scheme, financial assistance was distributed amongst Artisans (25%), selling institutions (45%) and producing Institutions (30%). It goes 20% for selling institutions and 40% for both artisans and producing institutions.

 Khadi Reform and Development Programme (KRDP)

Khadi Reform and Development Programme (KRDP) is formed for employment generation, enhancing the earning of artisans and ensuring the positioning of Khadi considering the present needs of Khadi industry. The main focus of this scheme is on Repositioning of Khadi and linking to market requirements, providing selective subsidy and enhanced remuneration.

Beekeeping – The Honey Mission

Honey Mission aims to improve the livelihoods of the rural communities. It works around five dynamics that include:

  • It’s an income generating activity
  • Medicinal and food value of honey
  • Supports agricultural activities
  • Contributes to forests conservation efforts
  • Facilitates healthy linkages between biodiversity towards sustainable livelihoods

 Market Development Assistance (MDA)

MDA scheme is promotion assistance for development of Khadi which is paid at 20% on production. Approximately 25% of MDA is paid to the institution from which 25% is given to artisans as incentive and 30% is offered to institution for production and 45% for marketing purposes. Under MDA scheme, financial assistance of 25% is reserved for payment among weavers and spinners as an additional incentive through their post/bank office account.

KVIC also implements various other promotional activities for the development of different village industries, such as handmade paper, polymer, agro and chemical based, bee-keeping and other forest related activities. KVIC loans are offered by various financial institutions at attractive interest rates.

Just after its establishment, KVIC took over All India Khadi and Village Industries Board. KVIC operates via its network of zonal offices located in Delhi, Bhopal, Bangalore, Kolkata, Mumbai (HO) and Guwahati. KVIC focuses on the planning, promotion and implementation of programs for the development of Khadi and other Village industries.

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