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. by Swati Sharma
Khadi institutions are the implementing agencies forwarding rebate benefits directly to the consumers and generate employments. 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. According to KVIC statistics, the khadi industry had a production of Rs17338. 87 crore as of 2008-09, a sales of Rs22748.19 crore and employment of 103.91 lakh.
New Schemes
The government is mulling to float a flexible scheme—Market Development Assistance (MDA)—as a replacement of the rebates on sales, which will be implemented in the next financial year. The scheme will privilege a financial assistance at the rate of 20% of production value on khadi and polyvastra, which will be shared among artisans, producing institutions and selling institutions in the ratio 25:30:50. It is also believed that the sales will be evenly spread throughout the year and further the institutions will have the flexibility to use the assistance in improving the outlets, products, giving incentives to customers.
Replying to a question in Rajya Sabha, Minister of State for MSME, Dinsha Patel, said that the scheme of rebate on sales caused delay in paying incentives to the institutions so much so that they would have to wait till sale and wait till next year to get the claims reimbursed.
Under the 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, ultimately benefiting the artisans.
According to the 2009-2010 report of the MSME, the value of khadi produced in the country fell from Rs585.25 crore in 2008 to Rs484.45 crore by December 2009; sales dropped by Rs 40 crore. Over 80% of annual sales of khadi products are restricted to the discount season, while less than 20% of sales are made during the remaining 8 months. The khadi commission employs a million artisans out of which 80 per cent are women. In order to show their protest, the Khadi Stock Ashrams in Haridwar protested in front of the shop, weaving khadi on the charkha, showing their resistance in Gandhian style.
Forlorn Hopes
The grimmer portraits of Mahatma Gandhi, grungy and faded colours of the national flags are ignored by passersby that lay unnoticed for years at the Khadi Gramodyog Bhavan in Connaugt Place (the central business district of Delhi), the somnolent air fills the place of its lost history and now even the purpose that it laid for years together, today hang broodingly while made-in-India flashes from one side.
Naresh Kadyan, secretary general of National Khadi & Village Industries Board’s Employees Federation, is running an online petition (change.org) that targets government to oppose these rebate cuts that make a common man suffer. At the time of filing the story, 132 people had signed the petition. He says, “The withdrawal of rebate has hit the mission and due to lack of funds, activities will face huge financial crises. It would definitely make things worse, proper funding, monitoring and honest implementation is the need of the hour.”
Losing Spirit
Khadi was introduced in 1920 as a political weapon and as the best instrument for giving concrete expression to the swadeshi spirit to boycott foreign goods. It is still being used as a political weapon but with a different approach. In those days, khadi rendered an opportunity to every man, woman and child to cultivate self-discipline and self-sacrifice as a part of the non-cooperation movement. However, all these spirits are dying with cultivation of corruption and selfish motives of the new India. On repeated attempts made by B&E to take official reaction on the issue, KVIC officials refused to comment. The khadi industry pleads for a major transformation today. As most of the politicians are shifting from khadi to linen clothes, there’s no one left to cut a figure in the society for khadi.
New Schemes
The government is mulling to float a flexible scheme—Market Development Assistance (MDA)—as a replacement of the rebates on sales, which will be implemented in the next financial year. The scheme will privilege a financial assistance at the rate of 20% of production value on khadi and polyvastra, which will be shared among artisans, producing institutions and selling institutions in the ratio 25:30:50. It is also believed that the sales will be evenly spread throughout the year and further the institutions will have the flexibility to use the assistance in improving the outlets, products, giving incentives to customers.
Replying to a question in Rajya Sabha, Minister of State for MSME, Dinsha Patel, said that the scheme of rebate on sales caused delay in paying incentives to the institutions so much so that they would have to wait till sale and wait till next year to get the claims reimbursed.
Under the 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, ultimately benefiting the artisans.
According to the 2009-2010 report of the MSME, the value of khadi produced in the country fell from Rs585.25 crore in 2008 to Rs484.45 crore by December 2009; sales dropped by Rs 40 crore. Over 80% of annual sales of khadi products are restricted to the discount season, while less than 20% of sales are made during the remaining 8 months. The khadi commission employs a million artisans out of which 80 per cent are women. In order to show their protest, the Khadi Stock Ashrams in Haridwar protested in front of the shop, weaving khadi on the charkha, showing their resistance in Gandhian style.
Forlorn Hopes
The grimmer portraits of Mahatma Gandhi, grungy and faded colours of the national flags are ignored by passersby that lay unnoticed for years at the Khadi Gramodyog Bhavan in Connaugt Place (the central business district of Delhi), the somnolent air fills the place of its lost history and now even the purpose that it laid for years together, today hang broodingly while made-in-India flashes from one side.
Naresh Kadyan, secretary general of National Khadi & Village Industries Board’s Employees Federation, is running an online petition (change.org) that targets government to oppose these rebate cuts that make a common man suffer. At the time of filing the story, 132 people had signed the petition. He says, “The withdrawal of rebate has hit the mission and due to lack of funds, activities will face huge financial crises. It would definitely make things worse, proper funding, monitoring and honest implementation is the need of the hour.”
Losing Spirit
Khadi was introduced in 1920 as a political weapon and as the best instrument for giving concrete expression to the swadeshi spirit to boycott foreign goods. It is still being used as a political weapon but with a different approach. In those days, khadi rendered an opportunity to every man, woman and child to cultivate self-discipline and self-sacrifice as a part of the non-cooperation movement. However, all these spirits are dying with cultivation of corruption and selfish motives of the new India. On repeated attempts made by B&E to take official reaction on the issue, KVIC officials refused to comment. The khadi industry pleads for a major transformation today. As most of the politicians are shifting from khadi to linen clothes, there’s no one left to cut a figure in the society for khadi.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri's Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
