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Aug 23, 2010

TAKE ACTION : House Sparrow ; Disappear From Indian Cities - Naresh Kadyan

Rebate as introduced in Khadi when it was realized that Khadi being a production by masses is costlier than machine made product. To give incentive to customer by bringing down Khadi price, rebate scheme was started by the Govt. of India., as well as by the state Governments.

The scheme went very well. It was attracting the customer. It was motivating the workers and inspiring the artisans. Later on when there was thinking at different level of Govt. to remove subsidies by different departments, rebate (subsidy) on khadi was also taken note of.

In the process of thinking a new concept of replacing rebate with MDA was floated. The Khadi Institutions which are the actual implementing agencies resisted this move. This went on. Now from this financial year MDA has been introducing.

Khadi is produced by Khadi Institutions. The way MDA has been Introduced, the Managers of Khadi institutions do not feel comfortable with and if there not comfortable than who will do the actual job of khadi

Now there is confrontation between Khadi Institutions and Khadi Commission. Khadi Institutions want rebate not MDA and Khadi commission is implementing the policy of Govt. i.e. MDA.

This confrontation will not help Khadi to grow. This should be avoided. This cans be avoided. A formula mutually agreed can be worked out . If Khadi Institutions are made to understand the proposed MDA and Khadi Commission agrees whatever is not found convenient to Khadi Institutions. I after studying the proposed MDA formula believe that if certain issues raised by Khadi Institutions are addressed sympathetically than the things can move in right direction based upon mutual trust. All concern may work on it. Otherwise the future of lacs and lacs of khadi artisans will be at stake.
Laxmi Dass,
Chairman Akhil Bhartiya Gramodhyong Mahasangh,
Naresh Kadyan,
Secretary General,
National Khadi & Village Industries Board's Employees Federation
(An apex body of All State KVIB's Employees Union's)
Cell - 09813010595, 09313312099

The withdrawal of 10 per cent rebate, which was given to the khadi industry around the year, and 20 per cent that was given for 108 days a year to mark the Gandhi Jayanti, has left the local khadi industry in the lurch with many units facing an immediate closure.

The Union Government had abruptly put an end to the rebate given to the khadi industry from April 1 onwards. The local industry, which was highly dependent on the rebate, has been hit the hardest by the decision.

Many khadi and village industries in the Country had provided employment to a considerable number of artisans. The latest move might render this workforce jobless in the near future.

The rebate was the lifeline for the industry, as khadi clothes were being sold in the market at a discount of 30 per cent, the decision would push the industry further towards extinction as it had been already facing a resource crunch.

It was quite unbecoming on the part of the Union Government to stop the rebate as this had been introduced to promote the khadi industry, which was endorsed by Mahatma Gandhi himself.

At present, the government owes over Rs 450 crore to the khadi industry of the Haryana state as rebate, which has not been released despite repeated pleas.

Even bank loans, which were earlier granted at an interest rate of 4 per cent, are now given at an interest rate of 12 per cent, which has made it altogether more difficult for the khadi units to survive.

In the present scenario, where highly sophisticated industry units had taken over the major market shares, khadi could only be saved with immediate intervention of the government.

“Even the Congressmen have stopped wearing khadi now. Perhaps the latest move of the government will completely ruin the khadi industry, which at one point of time had played an important role in the country’s struggle for freedom,”.

A strong appeal had already been put up before the Union Government and they could only hope for a positive response that would go a long way in safeguarding the interests of the khadi industry.

Khadi Institutions are the implementing agencies forwarding rebate benefits directly to the consumers and generate employments.

Two veteran Parliamentarians and political figures-- Mr Mulayam Singh Yadav (SP) and Mr Lalu Prasad(RJD) raised the issue in the Lok Sabha as to how the withdrawal of rebate on Khadi during the period following Mahatma Gandhi's birthday on October 2 will ruin cottage, village and Khadi industries  and destroy the unique symbol that India stands for and which the world has come to admire so much. The issue was raised by the two leaders separately during Zero Hour, enjoining upon the government  to restore the subsidy and rebate that was given to khadi products. In a dramatic manner, Mr Mulayam Singh showed to Speaker Meira Kumar a picture of the Mahatma weaving thread on a wheel, the 'Charkha', symbolising freedom, non-violence and self-reliance. The immortal Mahatma, who transcended time and space, used Khadi to fight the tyranny of the machines deployed by the British in England to destroy the fine handicrafts of the colonised country. The destruction of handicrafts led to weavers being thrown back into agriculture, whose productivity was already low, resulting in de-industrialisation of India. Later, Mr Prasad raised the issue again, saying that for many tribals in vast tracks of the land. it was a source of livelihood. The leaders were unequivocal that cottage industries were the backbone of the Indian economy  and need to be protected and nurtured, that 80 per cent of the rural populace consumes the hand woven cloth and that it was during the rebate period that brisk sales of khadi and village industries products takes place. Seeing the agitated members, Minister of State for Parliamentary Affairs V Narayansamy said he will convey the feelings of the House to the Minister concerned

In order to promote market for khadi products, the Government had continued through the Khadi and Village Industries Commission (KVIC) a policy of rebate on sale of khadi and khadi products till 2009-10. Normal rebate @10% of sales used to be given throughout the year whereas a special rebate of additional 10% used to be given for 108 days in a year coinciding with Gandhi Jayanti and / or local festivals. However, on the recommendations of Expert Committee and after trying several pilot projects and extensive consultations with stakeholders, the Government has introduced a more flexible scheme, namely, Market Development Assistance (MDA) Scheme on production of khadi in place of existing scheme of Rebate on sales with effect from 01.04.2010 for implementation by KVIC during 2010-11 and 2011-12. The scheme envisages financial assistance @ 20% of production value on khadi and polyvastra which will be shared among artisans, producing institutions and selling institutions in the ratio 25:30:45. Under the new system of MDA, sales are expected to be evenly spread throughout the year, the institutions will have the flexibility to use the assistance in improving the outlets, products, giving incentive to customers, etc.

The total number of workers in the Khadi and Village Industries sector as per data compiled by KVIC, is about 1.08 crore including an estimated 9.81 lakh artisans alone in the khadi sub-sector.

The erstwhile scheme of rebate on sales caused delay in paying incentives to the institutions in the sense that they would have to wait till sale and wait till next year to get the claims reimbursed. Under MDA, incentive would be provided immediately after production of the items and this is expected to ease out the working capital situation of the institutions by ensuring immediate liquidity which would in turn ensure timely payment to the artisans. The newly introduced MDA scheme has a provision of sharing 25% of the assistance (MDA) with the artisans as incentive or bonus in addition to their wages through their bank accounts or post office accounts. With these measures, the sector is expected to grow at a faster pace ultimately benefiting the artisans.

For the development of khadi sector, the Government, through KVIC, has introduced several other new schemes, in addition to MDA scheme for khadi and polyvastra, namely, ‘Workshed Scheme for Khadi Artisans’ for providing assistance for construction of worksheds for better work environment and the ‘Scheme for enhancing productivity & competitiveness of Khadi Industries and Artisans’ to assist 200 khadi institutions to make khadi industry competitive with more market driven and profitable production by replacement of obsolete and old machinery and equipment and ‘Strengthening of Infrastructure of existing Weak Khadi Institutions and Assistance for Marketing Infrastructure’ which includes strengthening of infrastructure of existing 100 weak selected khadi institutions. Besides, the recently introduced Khadi Reforms and Development Programme funded by the Asian Development Bank also provides for revitalization of khadi sector through measures which, inter alia, include enhanced employment and earnings of the artisans through their capacity building and empowerment.

This information was given by the Minister of State (Independent Charge) for Micro, Small and Medium Enterprises, Shri Dinsha Patel in a written reply to a question in the Rajya Sabha on 30 july, 2010.
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Posted: Monday August 23, 2010, 5:16 am
Tags: khadi [add/edit tags]

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Gopikanta G. (0)
Monday August 23, 2010, 5:39 am
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