s t r a t e g e m
khadi: industry
The pride of India goes awry
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
I
t was during the pre-Independence era
that the movement of khadi manufac-
turing gained momentum under the
guidance of the father of the nation Ma-
hatma Gandhi. The movement of manu-
facturing and wearing khadi was aimed
at dissuading Indians from wearing of
foreign clothes.
Gandhi once wrote: “Swaraj (self-rule)
without swadeshi (country made goods)
is a lifeless corpse and if swadeshi is the
soul of swaraj, khadi is the essence of
swadeshi.” With these words of Gandhi,
during the national struggle for freedom
(Swadeshi and Non-Cooperation Move-
ment), khadi became not only a symbol
of revolution and resistance but also a
part of the Indian identity.
no more rebate
The withdrawal of 10% rebate, which was
given to the khadi industry around the
40 3 september-16 september 2010
year, and 20% 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 government has decided to put an
end to the rebate given to the khadi in-
dustry from April 1, 2010 onwards. The
local industry, which was highly depend-
ent on the rebate, has been hit hard by the
hurried decision.
Experts say that khadi and village in-
dustries in the country provide employ-
ment to a considerable number of arti-
sans. “The government’s move might
render this workforce jobless in the near
future,” an industry observer says.
According to some Khadi and Village
Industries Commission (KVIC) mem-
bers, a chain reaction has started in the
rural khadi units — no increment to the
Sarvodaya Sangh workers, no daily wag-
es to poor weavers, weavers moving to
construction work etc. Opposition lead-
ers raised the issue in Parliament, saying
it is inappropriate and unfair on the part
of the government to stop the rebate
abruptly as this was introduced to pro-
mote the khadi industry, which was en-
dorsed by Mahatma Gandhi himself.
from bad to worse
The rebate was the sole purpose and life-
line for the industry as the clothes were
being sold at 30% of cost, and undoubt-
edly, this will further push the sector to-
wards extinction as this resource crisis
gets worse. Sector experts say its quite
interesting that on one side, the govern-
ment announced an allocation of `400
crore for the khadi industry in the Union
Budget 2010, and at the same time, it took
away the rebate quite willfully.
At present, the government owes over
`450 crore to Haryana state alone as re-
business&economy

bate and that is just one state in a country
of 29 states. Even bank loans, that were
given at 4%, are now being given at 12%,
which makes it all together for the khadi
units to survive. “We shall continue doing
the needful and live the Gandhian way in
spite of all opposition from the govern-
ment and will fight for our cause,” says a
store manager at Khadi Gramodyog in
Delhi, on the condition of anonymity.
Khadi institutions are the implement-
ing agencies forwarding rebate benefits
directly to the consumers and generate
employments. In order to promote mar-
ket 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 `17338. 87 crore as of
2008-09, a sales of `22748.19 crore and
employment of 103.91 lakh.
new schemes
The government is mulling to float a flex-
ible scheme—Market Development As-
sistance (MDA)—as a replacement of the
rebates on sales, which will be imple-
mented in the next financial year. The
scheme will privilege a financial assist-
ance at the rate of 20% of production
value on khadi and polyvastra, which will
be shared among artisans, producing in-
stitutions 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 im-
proving the outlets, products, giving in-
centives to customers.
business&economy
Replying to a question in Rajya Sabha,
Minister of State for MSME, Dinsha Pa-
tel, 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 li-
quidity, which would in
Government’s
turn, ensure timely pay- move might
ment to the artisans, ulti-
mately benefiting the arti-
render lakhs
sans. of people
According to the 2009-
2010 report of the MSME,
jobless in the
the value of khadi pro- near future
duced in the country fell
from `585.25 crore in 2008
to `484.45 crore by December 2009; sales
dropped by Rs 40 crore. Over 80% of an-
nual sales of khadi products are restricted
to the discount season, while less than
20% of sales are made during the remain-
ing 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 Gan-
dhi, grungy and faded colours of the na-
tional flags are ignored by passersby that
3 september-16 september 2010
khadi
(L to R) 1. Mahatma Gandhi working on a
weaving machine in 1930. 2. A khadi store in
Bangalore. 3. A fashion show ‘Khadi-the spirit
of freedom’ inside the premises of central jail
in Bangalore
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 his-
tory and now even the purpose that it laid
for years together, today hang brood-
ingly 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 tar-
gets 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 fi-
nancial crises. It would
definitely make things
worse, proper funding,
monitoring and honest im-
plementation 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. How-
ever, all these spirits are dying with cul-
tivation 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 com-
ment. 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.
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