CCEA approves continuation of Khadi Yojana; announces Rozgar Yukta Gaon for enterprise-based operations

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved to continue existing schemes subsumed under 'Khadi and Gramodyog Vikas Yojana', at the total cost of Rs 2,800 crore, for the period 2017-18 to 2019-20, according to a government statement. The schemes include Market Promotion Development Assistance (MPDA), Khadi grant, interest subsidy eligibility certificate (SEC) and Village Industry Grant.

The committee has also approved a new component, 'Rozgar Yukta Gaon', which introduces enterprise-based operations in the Khadi sector and creates employment opportunities for thousands of new artisans in the current and next financial year (2018-19 and 2019-20), the statement added.

Rozgar Yukta Gaon (RYG) aims at introducing an enterprise-led business model in place of a subsidy-led model, through partnerships among three stakeholders, namely, KRDP-assisted Khadi institutions, artisans, and business partners.

The statement said that it will be rolled out in 50 villages by providing 10,000 charkhas, 2,000 looms and 100 warping units to Khadi artisans, and would create direct employment for 250 artisans per village. Further, the total capital investment per village will be Rs 72 lakh as subsidy, and Rs 1.64 crore in working capital from business partners.

The focus under village industry verticals will be on the agro-based and food processing, handmade paper and leather, pottery, and wellness and cosmetics sectors, through product innovation, design development and product diversification.

For this initiative, advanced skill development programmes shall be conducted through existing Centres of Excellence, such as CGCRI, CFTRI, IIFPT, CBRTI, KNHPI, IPRITI etc. Four design houses will also be set up across the country to capture regional variations, provide access to Khadi Institutions, and evolve modern designs, with an investment of Rs 5 crore each.

Another key component of the initiative is to make production assistance competitive and incentive-based. The incentive structure focuses on improving productivity, turnover, and quality assurances, and will be extended on the basis of an objective scorecard.

While Khadi institutions will automatically be given the financial assistance of 30 percent, they need to strive for efficiency, optimal utilisation of resources, reduction of waste, and effective managerial practices, in order to become eligible for an additional incentive of 30 percent.

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