Published Jun 24, 2016

KOCHI: Despite the government spending an enormous amount of money and offering interest subsidies to the Khadi sector to the tune of Rs 2,000 crore every year, the production, sales and employment opportunities were declining considerably from 1994-95 to 2014-15. A national-level study by Kochi-based Centre for Public Policy Research indicates that funds allocated to the sector are mainly appropriated by the middlemen rather than the artisans and hence it is wastage of public funds.

As per the annual reports of the ministry of small and medium enterprises, the Plan amount spent on Khadi sector increased from Rs 194.27 crore to Rs 1,454 crore and non-Plan funds from Rs 43.7 crore to Rs 229.1 crore during the period from 1994-95 to 2014-2015.

However, production of fabrics declined from Rs 9.19 crore to Rs 5.19 crore while sales decreased from Rs 11.58 crore to Rs 6.09 crore respectively in the same period. The report of the Comptroller and Auditor General also reveals that Khadi and Village Industries Commission (KVIC) is ineffective in utilising the funds.

“The huge amount spent for the economic empowerment of the poor artisans is not reaching their hands, and it is wastage of public money. The KVIC certification imposed by the government to protect the industry is not market friendly and does not cater to the interests of customers,” said D. Dhanuraj, director of CPPR, who conducted the study along with Dr Lekshmi Nair.

The spinners and artisans are getting a meagre Rs 125 per day while the earning of women workers in other similar sectors is Rs 350. It says the poor branding and traditional marketing plans have also accelerated the decline in production and sales.

The study recommends a series of measures to revive the sector such as removal of the entry barriers like certification, marketing Khadi products through private retailers and introducing innovative products like Khadi jeans to attract the young customers. The CPPR intends to conduct a national stakeholders’ meeting to discuss the recommendations.


This news was first published in the Deccan Chronicle on 24th June 2016, Click here to read the original article Khadi brokers dupe artisans 

This article is based on the study done by CPPR on Khadi sector, Click to read the Complete report Evaluation of Government Interventions in Khadi Sector

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