What Is KVIC (Khadi and Village Industries Commission)?

Table of Contents:

1. Functions Of KVIC

2. Headquarters Of KVIC

3. What Is KVIC Functions?

4. KVIC Nomenclature

5. Functions Of Khadi And Village Industries Commission

6. What Is KVIC Schemes?

7. KVIC Loan

8. Eligibility Criteria For KVIC Loan

9. Khadi And Village Industries Commission Type- Loan Eligible Sectors

10. Required Documents for a KVIC Loan

11. Khadi And Village Industries Commission Type

1. Functions Of KVIC

The Khadi and Village Industries Commission develops, promotes, coordinates, and executes strategies to grow Khadi and other village industries in rural regions across the country. Additionally, KVIC assists in establishing a stockpile of raw resources for delivery to manufacturers. The commission's primary objective is to establish shared processing facilities for raw materials, such as semi-finished products. KVIC has also aided in the development of opportunities in the Khadi sector.

It is a constitutionally mandated body. It is administered by the Ministry of MSME Enterprises. It was founded in 1956 under the Khadi and Village Industries Act. It was modified twice between 1965 and 2006, the first time in 1965 and the second time in 2006. It is one of India's most significant constitutional, statutory, and quasi-judicial authorities.

2. Headquarters Of KVIC

KVIC's headquarters is in Mumbai, while its six Zonal Offices are situated in a handful of India's major cities, including:

• New Delhi
  
• Kolkata
  
• Mumbai
  
• Bhopal
  
• Bengaluru
  
• Guwahati

3. What Is KVIC Functions?

The Khadi Village and Industries Commission's broad goals, which include self-sufficiency and sustainability, are as follows:

• To increase awareness about Khadi in remote regions
  
• To create jobs
  
• To create marketable articles
  
• To promote self-reliance among the impoverished
  
• To strengthen rural communities

4. KVIC Nomenclature

It is essential to get a better knowledge of the often-used terminology to gain a holistic comprehension of the whole KVIC system.

• Khadi- It originated as a political weapon in the Swadeshi Movement and refers to cloth that has been weaved or spun by hand utilising the common charkha or wheel. It uses raw materials like cotton, silk, wool, and synthetic polymers. In India, the material is sourced from the following areas:
  
• Cotton: Maharashtra, Andhra Pradesh, West Bengal, Bihar, Uttar Pradesh
  
• Wool: Haryana, Himachal Pradesh, Jammu, and Kashmir.
  
• Silk: Bihar, West Bengal, Odisha, North Eastern States

5. Functions Of Khadi And Village Industries Commission

The functions of Khadi and Village Industries Scheme are-

• It develops, promotes, arranges, and executes initiatives aimed at advancing Khadi and Village Industries (KVI).
  
• It collaborates with a variety of rural development organisations on a variety of projects, including khadi and village industry in rural regions.
  
• It keeps a stockpile of raw resources that may be promoted farther down the supply chain.
  
• It contributes to the establishment of common service facilities that assist in the processing of raw materials.
  
• It assists in the promotion of KVI goods through craftsmen and other outlets.
  
• It establishes relationships with many marketing firms to promote and sell KVI goods.
  
• It supports and promotes KVI-related research and development.
  
• It contributes to the resolution of issues relating to KVI goods by encouraging research and improving competitive capability.
  
• Additionally, it assists in giving financial support to people and organisations involved in khadi and rural industries.
  
• It enforces rules for adhering to product standards to prevent the manufacturing of counterfeit goods.
  
• It is authorised to introduce initiatives, programs, and plans relating to the development of khadi and village industries.

6. What Is KVIC Schemes?

The Khadi and Village Industries Commission administers the following schemes (KVIC).

• Prime Minister’s Employment Generation Programme (PMEGP)
  
• Market Promotion Development Assistance (MPDA)
  
• Interest Subsidy Eligibility Certificate (ISEC)
  
• Khadi Reform and Development Programme (KRDP)
  
• Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

1. Prime Minister’s Employment Generation Programme (PMEGP)

PMEGP is a credit-linked subsidy program for the establishment of new micro, medium, and small businesses and job creation in rural and urban regions of the nation via KVIC, the State Khadi and Village Industries Board, and the District Industries Centre. The Khadi and Village Industries Commission (KVIC) serves as the national nodal body for the PMEGP scheme's implementation.

2. Market Promotion Development Assistance (MPDA)

The Market Promotion Development Assistance program was developed to increase artists' incomes. As an added incentive, craftsmen, spinners, and weavers get 25% of aid via their bank or post office account under the MPDA scheme.

3. Interest Subsidy Eligibility Certificate (ISEC)

Credit at a reduced rate of interest is available via the KVIC scheme through banks that have an "Interest Subsidy Eligibility Certificate", which is issued by the 'KVIC'.

4. Khadi Reform and Development Programme (KRDP)

KRDP aspires to equip rural craftsmen with a means of subsistence with minimum investment. Additionally, the KRDP assists in the development of traditional village businesses such as manufactured paper, honey, herbal medicine and cosmetics, leather, and agro-food processing.

5. Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

The purpose of the SFURTI initiative is to offer need-based support for the replacement of manufacturing tools, product development, the establishment of common facility centres (CFC), improved efficiency, enhanced marketing, training, and capacity building, among other things.

7. KVIC Loan

The commission's loans are handled via and regulated under PMEGP rules. Financial support is granted by the following criteria, which are mainly applicable to MSME specifications:

1. Loan Quantity

• Maximum Rs.25 lakhs in the manufacturing sector.
• Maximum Rs.10 lakhs in the business and service sector.

2. Investment limit per capita

• 1 lakh Rupees for plain areas
• 1.5 lakh Rupees for hilly area

3. Funding Pattern

The grid below illustrates the financing arrangement specified in KVIC loan components. Notably, the reserved, minorities, women, ex-servicemen, handicapped, northeast, and border regions fall under the special category.

4. Loan Tenure

Loans granted under the scheme typically have a term of three to seven years, including a six-month moratorium.

5. Margin

It is held in a separate account with a three-year lock-in period but is modified to reflect the KVIC loan.

6. Income Ceiling

There are no income limitations associated with the KVIC loan; rather, the loan is intended for new enterprises, and the applicant must have never received another loan.

8. Eligibility Criteria For KVIC Loan

Loans under the PMEGP are made to both individuals and organisations that satisfy the qualifying requirements.

• Individuals over the age of 18 who have completed at least class eight:
  
• Manufacturing Unit: Rs. 10 Lakh
  
• Service Unit: Rs. 5 Lakh
  
• Self-Help Groups, if they have not previously taken out a loan.
  
• Incorporated Societies.
  
• Charity funds.

9. Khadi And Village Industries Commission Type- Loan Eligible Sectors

According to the KVIC scheme's guidelines, the loan is available to just a few sectors:

• Processing of food (Agro-based)
  
• Mineral Products
  
• Hand-made fibres and paper
  
• Products of the forest
  
• Chemical and polymer goods
  
• Engineering in rural areas
  
• Textiles and services
  
• Biotechnology

10. Required Documents for a KVIC Loan

There are a variety of documents required for the KVIC online application.

• Borrowers' various Know Your Customer (KYC) documents.
  
• Caste or community accreditation is required to establish eligibility for one of the specified categories.
  
• Subsidy claim in accordance with eligibility.
  
• Certified copy of the society's or association's bye-laws.
  
• A copy of the rent or lease agreement for the buildings or shed that is not older than three years.
  
• The project report sets forth the costs for capital and working capital split for 1 cycle.
  
• A certificate from the bank's controlling office is required if there is no requirement for operating capital.

11. Khadi And Village Industries Commission Type

The interest rate on PMEGP loans and KVIC loans is the standard rate for MSME businesses. At the moment, the majority of banks charge between 11 and 12 per cent. However, under ISEC, the rate is 4%.

Conclusion

KVIC promotes many additional village businesses, including handmade paper, polymer, agro and chemical-based products, beekeeping, and other forest-related activities. Numerous banking organisations provide KVIC loans at competitive interest rates. KVIC acquired the All India Khadi and Village Industries Board shortly after its creation.

Also Read:

1) List Of Schemes Farmers Can Avail in India
2) How to Apply for a Mudra Loan?
3) What is a Mudra Loan? Features, Eligibility & More
4) 7 Different Types of Loans for Your Small Business
5) Which Are the Different Types of Loans in India?

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FAQs

Q. Why is khadi expensive?

Ans. Khadi is costly because of the time, labour, and years of skill required by spinners, weavers, and tailors.

Q. What is the definition of a village industry?

Ans. An industry classified as a village industry is one that is situated in rural regions of a state or nation with minimal resources. Villagers and rural residents create products and provide services to micro and small enterprises.

Q. What does Khadi Gram Udyog mean?

Ans. It is KVIC's marketing arm and is responsible for selling the goods produced in rural industries under KVIC's auspices. The term khadi refers to a fabric obtained from various areas of the nation where the raw material is plentiful. Additionally, Uttarakhand Khadi Items manufactures a variety of Khadi natural handcrafted personal care products. The greatest thing is that the goods are also accessible online at the Khadi Shop, in keeping with current trends.

Q. Where is the beneficiary's application to be submitted?

Ans. The recipient may submit his or her application or project online at www.kvic.org.in