Established in 1956, Khadi Village Industrial Commission (KVIC) is a statutory body created by an act of parliament. It is credited with planning, promotion, organization, & implementation of the program for the development of khadi & other village industries in the rural areas along with the other agencies engaged in rural development.

The functions of KVIC are:

  1. Building up a reserve of raw materials to supply to producers
  2. Creation of common service facilities for processing of raw materials
  3. Provision of marketing of KVIC products

It is entrusted with the task of providing financial assistance to people engaged in the development & operation of Khadi & Village industries & guide them with design and prototypes supplies.

With the help of KVIC, much-unemployed youth have established cottage industries and their offices are located near the district collector’s office.

In this blog, we will let you know about the Khadi Village Industrial Commission in detail.

About KVIC

Khadi and Village Industries Commission or KVIC is an organization constituted by the GOI under the Act of Parliament- ‘Khadi and Village Industries Commission Act, 1956’ in April 1957 to take over the work, earlier managed by the All India Khadi and Village Industries Board. Khadi and Village Industries Commission has six zonal offices in Delhi, Bhopal, Bengaluru, Kolkata, Mumbai (Head Office), and Guwahati, and offices in 28 states for proper implementation programs.

The commission was formed to plan, organize, and implement programs for developing Khadi and other village industries in the rural areas of India. The organization, constituted under the ministry of micro, small, and medium enterprises, aims to build up a reserve of raw materials for supplying it to producers. 

These producers are connected with the khadi and village industries in India in accordance with other agencies such as PMEGP, ISEC, CGTMSE in rural development wherever necessary. 

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What is Khadi?

Khadi is a crude material either cotton, silk or fleece which is hand-spun and hand-woven fabric.

To understand Khadi, we have to go a little back to our history, Khadi was spun by wheels (Charkha) during the Vedic period which was being revived and popularized by the Father of our Nation, Mahatma Gandhi during the Swadeshi movement to avoid foreign goods and use only goods that are made in India to take India towards development.

Khadi and Village Industries Relevance

Khadi or khaddar is a hand-spun, hand-woven natural fiber extracted from cotton, silk, or wool. Its origin is from India and Bangladesh and gained popularity in Indian culture with India’s freedom struggle and Mahatma Gandhi, who urged people to use Khadi and ditch foreign imported cloth.

Khadi and village industries are both labor-intensive. In the wake of industrialization and digitization around the globe, Khadi and village industries are favorable to a labor surplus country such as India. The focus is on Khadi and village industries as it requires little or no capital, making them economically viable for the rural poor.

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Khadi & Village Industries

In the wake of industrialization and mechanism, Khadi and Village Ventures as a financially suitable alternative for the rural poor who can set up these ventures practically with no or low capital investments.

The Objective of the KVIC

There are three primary objectives of this Commission:

Social ObjectiveEconomic Objective

Broader Objective

Providing employment in the provincial regionsProviding saleable articles that has marketCreating confidence among the individuals and building a solid network
  • It aims to build up a reserve of raw materials and easily supply it to the production agencies by creating common service facilities for processing raw materials as semi-finished goods and marketing KVI products.
  • To promote Khadi in rural areas.
  • To impart training to the artisans in these industries.
  • The social objective is to provide employment.
  • The economic aim is to produce saleable articles.
  • To encourage research studies in production techniques/equipment in Khadi or aspects of the village industries sector.
  • A significant objective is to create self-reliance and build up a strong rural community spirit.
  • To provide financial help through funds and schemes like CGTMSE, PMEGP, ISEC, or guide institutions or individuals in developing and operating Khadi/ village industries.

The commission is trying to achieve these objectives through different plans and projects.

Features of KVIC

  • Interest rate: The rate of interest will depend on the profile and business requirements of the applicant.
  • Business loans offered under the scheme are directed and governed by PMEGP under these criteria for particular MSMEs:
  • The business loan amount for the manufacturing sector is a maximum of Rs 25 lakh
  • The loan amount for the business and service sector is a maximum of Rs 10 lakh
  • The funding pattern is mentioned in the PMEGP scheme.
  • The repayment tenure is from 3 – 7 years, including the 6 months of the moratorium period.
  • No criteria for income capping

Margin lock-in of 3 years in another account, to be later adjusted with the KVIC business loan

Interest rate subsidy scheme

Offered by KVIC, the interest subsidy scheme applies to specific business loans offered by financial agencies like CGTMSE. The business loans are raised by KVIC for disbursement as capital investment/ working capital loans and are offered by:

  1. The institutions that are registered under the Societies Registration Act of 1860
  1. The co-operative societies registered under the Co-operative Societies Act of 1912:
    • Charitable trusts working for public welfare or religious purposes
    • Financial institutions such as scheduled and non-scheduled banks, nationalised banks, co-operative banks, state financial corporations or industrial development banks.

Who can avail of a KVIC business loan?

  • Individuals with a minimum of 18 years of age with 8th class pass certificate
  • Self Help Groups
  • Registered/ co-operative societies
  • Charitable trusts, etc

Implementation of the Projects and Plans under KVIC

  • The implementation of the plan begins at the Ministry of Micro, Small and Medium enterprises as they are the authoritative powers on the projects.
  • The ministry gets assets from the Central Government of India and makes it available to the commission for the execution of the projects and plans.
  • The Commission utilizes the assets through Khadi & Village industries Boards workplace in 29 states by subsidizing the Khadi and Village Organizations and co-agents
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Plans and Programs of the Commission

The programs of the Commissions are:

  • The Prime Minister’s Employment Generation Program (PMEGP) is the result of the merger of two plans – Prime Minister’s Rojgar Yojana (PMRY) and The Rural Employment Generation Program (REGP).
  • The Interest Subsidy Eligibility Certificate (ISEC) Scheme started in May 1977 that activated assets from banking foundations to accommodate the real store necessity and its accessibility from budgetary sources. Credits are given con at by the banks to the individuals to meet their working capital expenses.
  • MDA is a promotion assistance for the development of Khadi. MDA is paid at 20% on Production. Out of the MDA paid to the institution, 25% goes to Artisans as a direct incentive, 30% to an institution for production, and 45% for marketing.

Discount Schemes of KVIC

The discounts are accessible by the Government on the deals of Khadi and Khadi items. Ordinary refund of 10%, and extra unique discount of 10% for 108 days in a year.

The discount is permitted distinctly on the deals made by the organizations run by the Commission Boards and at the business places run by the enrolled establishments which are occupied with the creation of Khadi and Polyvastra.

As of late, the fund service has asked the micro, little and medium ventures service to redraw its refund plot for Khadi and town businesses.

How To Get a Loan from KVIC?

To avail of a loan from Khadi and Village Industries Commission (KVIC) you must approach the commission directly. They give loans at subsidized rates to aspiring candidates.
The employees are well equipped and adept to handle your queries.

Details about the loan are given on their website. Here is a link to help you in your search:

How can you avail of a business loan from the banks under the KVIC scheme?

There are multiple funding schemes/programs where public and private sector banks offer working capital or business loans to eligible applicants.

Some of the leading schemes under KVIC are the Prime Minister’s Employment Generation Programme (PMEGP), Scheme of Fund for Regeneration of Traditional Industries (SFURTI), Interest Subsidy Eligibility Certificate (ISEC), Market Promotion Development Assistance (MPDA), Khadi Reform and Development Programme (KRDP), etc.

The objectives, functions, features, and eligibility of these schemes or programs vary from each other.

Schemes Under KVIC

Prime Minister’s Employment Generation Programme- PMEGP

PMEGP is a credit-linked subsidy program launched in 2008 to replace two former schemes, the Rural Employment Generation Programme or the REGP scheme and the Prime Minister’s Rojgar Yojana (PMRY). The primary aim is to create employment in rural and urban areas across the nation.

Under the PMEGP scheme, the beneficiaries must invest a certain percentage of the project cost to avail subsidy. 

SFURTI- the scheme under the Fund for Regeneration of Traditional Industries Ministry

SFURTI is a scheme of the Fund for Regeneration of Traditional Industries Ministry of MSME, launched in 2005, with the primary objective of categorizing the traditional artisans and industries into groups and providing long-term sustainability through financial support (maximum of Rs 8 crore for any project).

The central/state governments and semi-government institutions, Non-Government Organisations (NGOs), Panchayati Raj institutions (PRIs), etc., are eligible to apply for this scheme.

Interest Subsidy Eligibility Certificate (ISEC)

The Interest Subsidy Eligibility Certificate (ISEC) Scheme was introduced in May 1977 and is a significant funding source for the Khadi program as it applies to all registered institutions of KVIC.

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The scheme was introduced to mobilize funds from banking institutions to bridge the gap between the actual fund requirement and its availability from budgetary sources. 

Market Promotion Development Assistance (MPDA)

Market Promotion Development Assistance or the MPDA was launched to provide market promotion and development assistance to Khadi industries. The aim of MPDA is to ensure increased earnings for the artisans.

Khadi Reform and Development Programme (KRDP)

Khadi Reform and Development Programme (KRDP) was initiated to aim towards employment generation, enhancing the earning of artisans, and ensuring the positioning of Khadi in the market considering the present needs of the Khadi industry, providing selective subsidy with enhanced remuneration.

To learn more about the Khadi and Village Industries Commission check out Ziploan’s website.

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Sale of Khadi

In recent years, sales of Khadi have increased as the fashion houses have experimented successfully with the materials and created stylish clothes.

KVIC Chairman Shri Vinai Kumar Saxena attributed the massive sale figures to the frequent appeals of the Prime Minister Shri Narendra Modi to buy Khadi and also its growing popularity among masses particularly the youth.

“Despite the Corona pandemic, a large number of people still came out to buy Khadi which is a result of the repeated appeals of the Hon’ble PM. Khadi has become a household name and the number of Khadi lovers is constantly growing.

And despite a manifold increase in production, KVIC has ensured the highest quality of its product range that has kept our consumer base intact,” Saxena said.

He added although the sale figures this year fell just short of the last year’s mark because of the pandemic, the over Rs 1 crore single-day sale figure was still quite satisfactory.

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Frequently Asked Questions – KVIC

What is KVIC scheme?

KVIC is a statutory body formed by the Government of India under the KVIC Act of 1956 that aims to nurse employment and economic uplift in rural India. Khadi is a hand-made cloth using the simple charkha, an implement common in rural India.

How can I get KVIC certificate?

The prospective Khadi Institutions can file the application online for registering their institution and issuance of Khadi Certificate. The online application can be accessed through KVIC website or and click on “Khadi Institutions Registration Sewa ” listed at Sr.

What are the functions of KVIC?

The KVIC is charged with the planning, promotion, organisation, and implementation of programs for the development of Khadi and other village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary.

Who can apply for KVIC?

Any adult beneficiary above 18 years is eligible for financing under PMEGP.

What are the schemes implemented through KVIC?

The Prime Minister’s Employment Generation Programme (PMEGP) is the result of the merger of two schemes – Prime Minister’s Rojgar Yojana (PMRY) and The Rural Employment Generation Programme (REGP).

What is the difference between KVIC and KVIB?

Khadi and Village Industries Commission (KVIC) is the nodal implementing agency at the national level. KVIC, Khadi & Village Industry Boards (KVIB), and District Industry Centres (DIC) are the implementing agencies in the States.

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