Signing of loan agreement between MSME and ADB for Khadi Reform Programme


An agreement on extensive programme on Khadi Reforms has been signed here today between Ministry of Micro, Small and Medium Enterprises and Asian Development Bank and Khadi and Village Industries Commission (KVIC).

Asian Development Bank will make available a loan of US$ 150million to the Government in four tranches which will be equivalent to approximately Rs. 717 crore under the existing rate of one US$= Rs.47.79. This amount will be utilized for the development of 300 identified khadi institutions. The development/reforms will be taken up in 50 khadi institutions in the first phase, identified on the basis of pre-decided selection criteria. The Reforms will be taken up in the remaining 250 khadi institutions thereafter. It is estimated that more than 60,000 artisans will be directly benefited by this Reform Programme and “Khadi Mark” and setting up of “Marketing Organisation” will help in improvement in the sales of khadi products.

An important aspect of the Khadi Reform Programme relates to giving freedom to the khadi institutions to sell their products at market determined prices as against the “cost chart regime” as it exists today.

After Shri Dinsha Patel, Minister of State (Independent Charge) took over in the Ministry of Micro, Small and Medium Enterprises, the rebate scheme was extended for another year and now an improved and more effective scheme namely Market Development Assistance (MDA) has been formulated which will ensure improvement in the existing structure of the khadi institutions and sharing of the financial benefits arising out of better marketing with the artisans and weavers.

Khadi Reform Programme is one of the various initiatives taken by Ministry of Micro, Small and Medium Enterprises (MSME) for reforms in the agro rural sector industries sector This Reform Programme includes the empowerment and enhancement of earning of spinners and weavers, enhanced participation of spinners and weavers in the management of the khadi institutions, address the problems faced by khadi institutions on capital inadequacy, improvement in marketing, skill development and training of artisans, improvement in the quality of raw material, better production of sliver/roving through Public Private Partnership(PPP) etc.

The agreement on extensive programme on Khadi Reforms was signed in the presence of Senior Officials of Department of Economic Affairs, Ministry of Micro, Small and Medium Enterprises, Asian Development Bank and KVIC.