Khadi and Village Industries Commission (KVIC)

KVIC is a statutory body. That means a law made by Parliament created it. It is not just a government office.

What are the key facts?

• The law is the Khadi and Village Industries Commission Act, 1956. It is Act No. 61 of 1956.
• KVIC came into existence in April 1957.
• It took over the work of the earlier All India Khadi and Village Industries Board.
• It works under the Ministry of MSME.
• It has a Chairman, who is responsible for its proper functioning.
• The current Chairman is Manoj Kumar, as reported in May 2026. Some reports also write his name as Manoj Goel.

What is a simple example?

• A statutory body is like a school board set up by a state law. The law gives it a name, powers and duties.
• This is only an illustration.

What is the common misconception?

• Some students think KVIC is a private trust or a company.
• It is a public body made by an Act of Parliament.

KVIC plans and runs programmes for Khadi and other village industries in rural areas. Khadi means hand-spun, hand-woven cloth.

What are its main aims?

• A social aim: to provide employment.
• An economic aim: to make articles that sell.
• A wider aim: to build self-reliance among the poor and a strong rural community spirit.

What are its main jobs?

• It builds a reserve of raw materials and tools for producers.
• It sets up common service facilities and helps with marketing.
• It trains artisans and encourages co-operative effort.
• It supports research on production methods.
• It gives financial help to institutions and individuals.
• It takes steps to check that products are genuine and meet quality standards.

What is a simple example?

• Think of a Khadi weaver’s group. KVIC may help with training, raw cotton and a shop to sell the cloth.
• This is only an illustration.

What is the common misconception?

• Some students think KVIC only sells Khadi cloth.
• Its work is wider. It also covers village industries and research.

PMEGP did not start from nothing. It joined two older schemes into one.

Which two schemes merged?

• The Prime Minister’s Rojgar Yojana (PMRY).
• The Rural Employment Generation Programme (REGP).
• Both were running until 31 March 2008.
• The merged scheme is the Prime Minister’s Employment Generation Programme (PMEGP), a credit-linked subsidy scheme for micro-enterprises.

Who runs PMEGP?

• The Ministry of MSME administers it as a central sector scheme.
• KVIC is the single nodal agency at the national level.
• At State level it works through KVIC directorates, State Khadi and Village Industries Boards, District Industries Centres and banks.

What do the 2026 figures say?

• In May 2026 the KVIC Chairman said PMEGP had given about ₹30,000 crore of margin money against loans of about ₹80,000 crore.
• He said more than 10 lakh units had been set up so far.

What is a simple example?

• A young person plans a small bakery. PMEGP gives a subsidy on the project cost, and a bank gives the loan.
• This is only an illustration.

What is the common misconception?

• A question may ask which single scheme became PMEGP. That is a trap.
• Two schemes merged into it, not one.

The way the government helps Khadi institutions has changed over time. It moved from a rebate to market development assistance.

What replaced the rebate?

• KVIC says Market Development Assistance (MDA) was introduced in place of the earlier system of rebate.
• Under MDA, help is about 20 per cent of the cost of production of Khadi and Polyvastra.
• The institution can use it to improve outlets, products and production.

What is MMDA?

• Modified Market Development Assistance (MMDA) came with the Ministry’s expanded scheme from the third quarter of 2016-17.
• It aims at technology upgrades, product design, and modern sales outlets.
• It is paid on the prime cost at a set rate. For cotton, muslin, wool and Polyvastra the rate is 35 per cent.
• Later, the scheme came under the Khadi Gramodyog Vikas Yojana, from 2018-19.

What is a simple example?

• A rebate lowers the price at the shop counter. MMDA instead pays the institution to improve its tools, design and shops.
• This is only an illustration.

What is the common misconception?

• Some students think MMDA is only a renamed rebate.
• It works differently. It funds upgrades and incentives, not just a lower price.

KVIC must also check that products are genuine and meet quality standards. The Khadi Mark is one tool for that.

What is the Khadi Mark?

• KVIC publishes Khadi Mark Regulations, 2013.
• Khadi institutions that take MMDA must hold a valid Khadi Mark Certificate.
• The mark tells a buyer that the product is certified Khadi.

What is a simple example of the Khadi Mark?

• A shopper sees a Khadi Mark on a shirt. It tells her the maker holds a certificate.
• This is only an illustration.

What is the Khadi Mark misconception?

• Some think any shop may use the word Khadi freely.
• KVIC’s rules exist to guard against wrong use of the name.

No. Khadi and handloom are close, but they have different bodies.

Who looks after handloom?

• The Development Commissioner for Handlooms looks after handloom.
• This office is under the Ministry of Textiles.
• It runs the National Handloom Development Programme.

What is a simple example?

• A hand-spun, hand-woven Khadi shirt is KVIC’s field.
• A silk handloom saree from a weaver’s cluster belongs to the handloom office.
• This is only an illustration.

What is the common misconception?

• Many students think KVIC is the nodal body for handloom too.
• It is not. Handloom has its own office and its own ministry.

KVIC reported record business in 2025-26. Treat these as provisional figures.

What did KVIC report?

• Business of about ₹1.87 lakh crore in 2025-26.
• A target of ₹2.51 lakh crore for 2026-27.
• Employment of more than two crore people.

How do they compare with 2024-25?

• Provisional data for 2024-25 gave production of over ₹1.16 lakh crore.
• Sales in 2024-25 were over ₹1.70 lakh crore.
• Production was over ₹26,000 crore in 2013-14.

What about artisan pay?

• KVIC raised spinners’ pay to ₹15 per hank from 1 April 2025.
• KVIC said artisans’ wages had risen by 275 per cent over 11 years.

What is a simple example?

• A hank is one measured bundle of yarn. A spinner who makes 10 hanks earns ₹150 at this rate.
• This is only an illustration.

What is the common misconception?

• Some students mix up turnover, sales and production. They are different measures.
• Production is lower than sales in these reports. Read the label before you pick a figure.

Exams like one-line facts about KVIC. Learn these in a set.

What are the likely questions?

• Under which Act was KVIC set up? The KVIC Act, 1956 (Act No. 61).
• Under which ministry? MSME.
• Which two schemes merged into PMEGP? REGP and PMRY.
• What came in place of the Khadi rebate? Market Development Assistance, and later MMDA.
• Who looks after handloom? A separate office under the Ministry of Textiles.

How do you answer fast?

• Link each fact to one word: Act, MSME, merger, MDA, handloom.

Why are the wrong options wrong?

• An option naming the Rural Development Act or the Cottage Industries Act is made up.
• An option naming Rural Development, Commerce or Textiles as KVIC’s ministry is wrong. KVIC is under MSME.

Five slips are common on this topic.

What are the traps?

• One scheme: saying one scheme became PMEGP. It was two.
• Wrong ministry: naming the wrong ministry for KVIC. It is MSME.
• Rebate as MMDA: calling MMDA a renamed rebate. It funds upgrades.
• Handloom: treating handloom as KVIC’s field.
• Figures: mixing sales, production and turnover. Read the label.

How do you remember it?

• Use this chain: Act 1956, MSME, REGP plus PMRY, MDA, no handloom.