He, the Chairman of the Department-related Parliamentary Standing Committee on Industry, having been authorised by the Committee, hereby present this Ninety-sixth Report of the Committee. The Report is on the status of Khadi and Village Industries in States of Andhra Pradesh, Karnataka and Kerala.
2. The Sub-Committee-IV for Ministry of Agro and Rural Industry visited Andhra Pradesh, Karnataka and Kerala from 20th to 27th July, 2002 and held discussions with the officials of KVIC, KVIBs of these States and State Governments.
3. The Sub-Committee at its meeting held on 28th November, 2002, considered and approved the
Report.
4. The Committee in its meeting held on 11th December, 2002 considered and adopted the Report.
New Delhi; 19th December, 2002
Dr. P. C. Alexander
Chairman,
Department-related ParliamentaryStanding Committee on Industry.
Report
Background
1. Khadi and Village Industries have the unique capacity to generate large employment opportunities in the rural areas at a low capital cost and hence occupy an important place in the national economy. These industries develop local initiatives, cooperation and spirit of self-reliance in the economy and at the same time help in utilization of available manpower for processing locally available raw materials by adoption of simple techniques.
1.1 Prior to Independence, the development of Khadi and Village Industries was entirely a non-governmental effort under the inspired guidance of Mahatma Gandhi. After Independence, the Government of India assumed responsibility of bringing development of Khadi and Village Industries within the overall framework of the Five Year Plans and set up the Khadi and Village Industries Commission (KVIC) by an Act of Parliament in 1956. In the year 1987-88, the Government of India, as per the recommendations of the Khadi and Village Industries Review Committee (KAVIRC), amended the KVIC Act, which ushered in considerable expansion of the scope of village industries making it eligible for KVIC finance and coverage. KVIC now plays pivotal role in the strengthening of rural economy by providing employment opportunities by promotion of Khadi and Village Industries.
1.2 One of the principal objectives of the KVIC is to promote non-farm employment opportunities in rural areas. The Committee understands that KVIC has been able to generate full time as well as subsidiary occupation to the rural people. A major chunk of these beneficiaries are from the weaker sections of the society, such as women, SC/STs, minorities etc., which reflects the acceptability of KVI programme for the betterment of weaker sections in rural areas. About 40 per cent of employment generated under KVI Sector goes in favour of rural women. Another important feature of KVI programme is the large coverage of SC/ST artisans/entrepreneurs. The coverage of SC/ST artisans in the employment generated under KVI programme is as high as 34 per cent. KVIC implements its programmes through 30 States/UT level Khadi and Village industries boards, 5599 registered institutions, 30,138 cooperative societies and 8.43 lakh individuals and about 7500 exclusive sales outlets throughout the country.
1.3 Khadi is an activity committed for the upliftment of the poor. It provides supplementary employment to enhance their income in spare time and that too at their doorsteps. Most of the women spinners spin only after completing their household chores. Thus it helps in maintaining their family life undisturbed. This is very important from the social point of view too. When a women goes out of house for job, naturally, the next generation suffers for want of due care. This drawback of industrialization is avoided here.
Study of the Status of Khadi and Village Industries by Sub-Committee-IV for the Ministry of Agro and Rural Industries
1.4 The Sub-Committee-IV for Ministry of Agro and Rural Industries of Department Related Parliamentary Standing Committee on Industry under the convenorship of Shri A.C. Jose, M.P. (Lok Sabha) at its meeting held on 14th March and 4th April, 2002, decided to assess the status of Khadi and Village industries in the States of Andhra Pradesh, Karnataka and Kerala and visited Visakhapatnam, Hyderabad, Bangalore and Cochin from 20th to 27th May, 2002 and held discussions with the representatives of the KVIC, KVIBs and State Governments of these States. The Sub-Committee's observations are as follows :
Khadi and Village Industries in Andhra Pradesh
2. The Regional Office, Khadi and Village Industries Commission, Visakhapatnam covers five North-Coastal districts of Andhra Pradesh viz. Srikakulam, Vizianagaram, Visakhapatnam, East and West Godavari Districts. The remaining districts are covered by the State Office, KVIC, Hyderabad.
2.1 The Regional office deals with 14 institutions for the implementation of Khadi Programme, out of which 12 are covered under KVIC fold and 2 are under Andhra Pradesh State Khadi and Village Industries Board.
The details showing the categories of the institutions covered under Khadi Programme are furnished below :-
Sl. No.
Name of the institution
KVIC
KVIB
Category – A
1.
Andhra Fine Khadi Karmikabhvrubi Sangham, Ponduru, Srikakulam
*
–
2.
Gram Swarajya Sangham, Srikakulam
*
–
Total :
2
–
Category – B
1.
Grama Swarajya Sangham, Tuni
*
–
2.
Swarajya Sangham, Tuni, East Godavari
*
–
3.
Swarajya Sangh, Kotananduru, East Godavari District
*
–
4.
Swarajya Sangth, Pithapuram, East Godavari District
*
–
5.
Swarajya Sangth, Paykarao Peta, Vizag District
*
–
6.
Swarajya Sangham, Vemulapudi, Vizag District
*
–
7.
Gandhi Khaddar Society, Anakapalli, Vizag
*
–
8.
SJNKK Sangham, Srikakulam
*
–
Total :
8
–
Category – C
1.
East Godavari District Khadi Rural Development Samatha, Kakinada
*
–
2.
Narasapuram, JK Gram Samithi, Palakollu
–
*
3.
Bhimavaram, TQ KG Sangham, Bhimavaram
–
*
Total :
1
2
Category – D
Nil
Nil
Category – Others
Toorpu Godavari Zilla K. Grama Samithi, Ramachandrapuram (Black listed)
*
–
1
–
Total :
12
2
Rebate Payment Position Khadi Poly (Rs. in lakhs)
a. During 1999-2000 58.69 4.20
b. During 2000-2001 56.91 1.56
c. During 2001-2002 (upto 31.12.2001) 19.63 2.12
Pending Position
(as on 31.3.2002) 7.40 5.58
2.3 During the course of its visit the Committee found that state KVIB performance was not satisfactory. It showed no 'A' or 'B' category institution to mark its impact. Further, the number of institutions monitored by it was only two against 12 institutions monitored by KVIC.
2.4 The Committee observes that in order to identify the drawbacks in the functioning of the Khadi institutions and to take timely remedial measures, KVIC should closely monitor Khadi institutions under various categories like A, B, C and D especially those institutions whose functioning is not at the desired level. KVIC should ensure decentralization in decision making and delegation of more powers to State KVIB alongwith development of a strong monitoring system.
Initiatives taken for enhancing khadi sales
2.5 The Committee was apprised that a meeting was convened by KVIC with all the institutions under this Region to enhance the sales of the Khadi by conducting the sale outside the Bhandars, undertaking mobile sales, hawking sales at important places, main roads of the towns/cities. The representatives were requested to participate in the Khadi exhibition-***-sales at Guntur and other Fashion shows. A fashion show *** sales was organized at Rajahmundry with NGOs and East Godavari District Khadi and Rural Development Samatha, Kakinada.
2.6 The Committee observes that Khadi sales pick up only when rebate is offered to the customers. Sans rebate, Khadi sales have shown downward trend during the year. The Committee recommends that KVIC should encourage individual entrepreneurs to sell Khadi products on commission basis. There should also be attempt to make the Khadi products cheaper, qualitatively better and market competitive.
Khadi Production and Sales Activities for the last Three years
Heads
1998-99
1999-2000
2000-01
Production (Qty.) Lak. Sq. Mt.
27.00
11.443
9.820
Value (Rs. in lakhs)
1386.37
607.36
569.32
Sales (Value) (Rs. in lakhs)
867.11
368.03
332.68
2.7 During the course of interactive session in Visakhapatnam the Committee was informed that out of 35 Khadi producing Institutions financed under the jurisdiction of the Regional Office, Visakhapatnam, 23 institutions were blacklisted by the Central Office Mumbai, after the special audits were conducted.
2.8 The Committee during the interactive session with KVIC/AP KVIB, was informed about the malpractices and mismanagement at various levels of the Khadi institutions. The Committee is of the view that this may be one of the reasons of cost of Khadi going up and products being unaffordable. The Committee, therefore, recommends that certain in-house activities like concurrent evaluation, data collection etc. of these institutions should be verified by outside professional agencies.
Village Industries
Existing Village Industries
2.9 The Committee was apprised that under the Regional Office Visakhapatnam the following Village Industries are covered under the existing programmes :
Fruits and Vegetables processing Industry, Pickles manufacturing, milk products, Bee-keeping, soap and brass-metal sheet rolling unit (under Rural Engineering Industry), Processing of Cereals and Pulses, Rural Transport, Village Pottery, Lime, Carpentry and blacksmith Stone-cutting etc.
UNDP Project in the State
2.10 Artisan group need forward and backward linkages and also certain common facilities like equipments, storage space, technical and design service support. This is planned to be given by cluster development programme. An enabling scheme is included as a part of package. Further, KVIC has already commenced cluster activities in the State locations with UNDP support. The representative of KVIC apprised that a proposal was sent to Central Office to provide employment to 35 families under Village Industries (Pottery) under technology transfer scheme. Under UNDP/Hand Made Paper, one training programme is being organized at Seethanagram, Rajahmundry, East Godavari District.
2.11 The Committee observed that there is vast scope for implementation of the programmes like Pottery (Mineral based industry), Mango Jelly (Fruits and Vegetables Processing Industry), Palm Gur, Lime industry, Beekeeping, Carpentry and Blacksmith, Rural Transport, Processing of Cereals and Pulses, Medicinal Plants, Paper bags conversion units, Service Sector industries, Dhabas and fast food units under tourism, Bio-manure. Under the UNDP training programme extraction of banana Fibre programme is going to be organized by batches at Kasturba Gandhi National Memorial Trust, Seethanagaram, Rajahmundry, East Godavari District. There is need to explore their potential in the state as these areas have not been tapped. The Committee, therefore, recommends that efforts should be made by KVIC/KVIB to develop these programmes in the state on priority basis and realize their fullest potential. NGOs may also be invited and encouraged to popularize these programmes.
Cluster Formation
2.12 The Committee was apprised that Mango jelly cluster survey was undertaken in Vizianagaram District and the State Bank of India, Vizianagaram has agreed to finance the unit to the tune of Rs. 58.00 lakhs. The cluster will benefit nearly 200 families and also with a scope of imparting training on the personal and professional hygiene on the mango jelly making at CFTRI, Mysore. A survey was also undertaken in the following areas :–
(a) Artisan cluster under rural Engineering Industries on Brass/Copper utensils making unit. The survey work was undertaken in West Godavari District and the proposal was sent to Central Office, for approval before implementation. This will benefit 109 artisans directly.
(b) Palm fiber extraction – The survey work was undertaken and a proposal was sent. This will provide employment to 225 families.
2.13 The Committee observes that cluster approaches need to be encouraged in a big way in the rural sector as it not only builds community spirit but also provides employment at a low cost. The Committee recommends that proposals sent by the State agencies for cluster forming like mango-jelly cluster, brass/copper cluster, palm fibre extraction cluster should be expedited at the Central office level to give a boost to the community programme.
Rural Employment Generation Programme (REGP)
2.14 The Khadi and Village Industries Commission, Mumbai had introduced the Rural Employment Generation Programme, during the year 1996-97. The Andhra Pradesh Khadi and Village Industries Board, has been implementing the scheme since 1997-98. The Board has sanctioned and released Margin Money to 1782 units amounting to Rs. 18.05 crores upto 2001-02 and employment provided to 12,800 persons in the rural areas.
2.15 The schemes are mostly conversion of paddy into rice, ravva, masala powders, papad making, poultry feed, cattle feed, palmgur products like leaf cups and plates, jaggery manufacturing, milk based products, fruit processing, cashew processing, cement bricks, fly ash bricks, stone crushing/polishing, tent houses, dhabas, TV/computer servicing, electronic goods assembling, steel and wooden furniture, book binding, foot wear units, mineral water, soft toys manufacturing, bamboo products, Xerox centres, units under rural transportation etc.
2.16 As per the budget allocation of the REGP Directorate, District-wise targets for the year 2002-03 for the Regional Office, Visakhapatnam is as follows :
Sl. No.
Name of the District
No. of Projects
Funds allocated
(Rs. in lakhs)
1.
Srikakulam
150
37.50
2.
Vizianagaram
150
37.50
3.
Visakhapatnam
150
37.50
4.
East Godavari
250
62.50
5.
West Godavari
250
55.00
Total
920
230.00
Further that Office has allotted REGP grant for backward and forward linkages for the year 2002-03 is as follows :
Sl.
No.
Details
No.
Amount
(Rs. in lakhs)
1.
REGP units to be verified physically during 2002-03
920
0.368
2.
REGP exhibitions to be conducted during 2002-03
01
5.00
3.
REGP workshops to be conducted during 2002-03
05
0.50
4.
Awareness camps on REGP to be conducted during 2002-03
05
0.10
5.
Quarterly Bankers Review meetings (with nodal Branch) to be conducted during 2002-03
04
0.40
2.17 Out of the sanctioned REGP amounts, the 1st instalment of Rs. 57.50 lakh had been received by that Office on 8.5.2002 and had been deposited on the same day at Andhra Bank, Maharanipeta Branch. Five (5) nationalized banks have been selected as the nodal banks for the implementation of Rural Employment Generation Programme for the year 2002-03.
2.18 The Committee observes that REGP is meant for lower strata of society, people of labour class who earn their bread on daily basis. The Committee recommends that every effort should be made to achieve the target for the year 2002-03 by the regional office, Visakhapatnam and more funds should be infused in the state for the scheme considering the number of such people in the State.
2.19 The Committee came to know that as far as EDP is concerned that office has not received any sanction for conducting EDP training of REGP beneficiaries for the year 2001-02 and 2002-03. Hence EDP training programmes were not conducted in this region so far.
2.20 The Committee observes that EDP training to beneficiaries forms an important part of the village industries programmes. It is a Sorry state of affairs that sanction for EDP programmes for 2001-02 and 2002-03 have not been received by the KVI office in Andhra Pradesh. The Committee views this seriously and recommends corrective action.
Physical Reformance of the Previous Years
2.21 As per the information received from the Directorate of REGP 120 units have so far received the Margin Money during 1999-2000 to 2001-02. The year-wise performance is as follows :
Year
No. of Units
1999-2000
14
2000-01
23
2001-02
83
Total :
120
2.22 Physical verification of the units financed during 1999-2000 and 2000-01 was conducted. Out of the 23 units financed during the year 2000-01, it was observed that only 2 units are not working. The Bankers have initiated legal action against one unit.
2.23 Some other beneficiaries as well as bankers have denied the receipt of the loan and Margin Money. The matter is under investigation. Similarly 100% survey on the 98 tractors financed by AP Khadi and Village Industries Board had been taken up and the survey was underway. The final report is awaited.
2.24 The Committee is constrained to note the denial of loan and margin money by the beneficiaries. The Committee observes that such loopholes need to be plugged to the KVIC/KVIB if village industries are to strengthened.
Human Resource Development (HRD)
2.25 The Committee was apprised that :–
l 90 staff of the 10 Khadi institutions in this region are provided training on "Salesman Communication Skills and attitude.
l 50 ladies and gents of the farming class have been given one day training *** awareness camp on Bio-manure/Vermicompost programme.
l Six officials have been deputed for Hindi training programme.
l Three officials of the Regional Office have been deputed to the MTDC Bangalore to attend the workshop/orientation programme on REGP.
l Three officials of the Regional Office also have been deputed to MTDC Bangalore to attend the legal workshop on legal matters/legal recovery.
l One Bio-Technology staff of this office has been deputed for training on quality control of Bio-manure at Agarkar Research Institute, Pune.
l Two Bio-Technology staff of this office have been deputed for training programme on condensed course on Bio-manure/vermin compost as Pune Agriculture University.
l One Official has been deputed for training on PV system on Solar Energy at SEC, Mines, New Delhi.
2.26 The Committee observes that there are no Departmental or non-Departmental Training Centres in the Andhra Pradesh. There is no training centre either under KVI Board. The officials of Regional Office, Andhra Pradesh are deputed to attend training outside the State. The Committee, therefore, recommends that training centres should be set up in the State so that maximum number of persons can be trained and benefit from the programmes.
Marketing Development
2.27 During the interactive session in Visakhapatnam, the Committee came to know about the absence of any mechanism to develop marketing of KVI products in the State.
2.28 The Committee is of the opinion that Marketing needs to be given new orientation. Marketing is the area where utmost attention has to be paid. In spite of providing some good quality products the marketing has been poor which has affected Khadi sales adversely. The Committee, therefore, recommends that sales outlets in the KVI sector should be modernized with proper computerized inventory management system. A joint advertisement campaign on cost sharing basis with KVIB and KVIC institutions should be started. If proper attention is paid to it and goods/products are branded and packaged, like private companies do, Khadi products can not only do good business in the domestic markets but also can be sold in international markets because there is good demand for some Khadi products like silk, cotton etc.
Quality Control Lab
2.29 The Committee was informed that quality control/testing lab on Khadi goods and Yarn for testing the quality of Khadi yarn/material is proposed to be set up at Grama Swarajya Sangham, Srikakulam. The proposal has already been sent to Khadi Coordination, KVIC, Mumbai for consideration and approval.
2.30 The Committee recommends that the proposal for quality control/testing lab on Khadi goods and yarn is in the interest of the industry and it should be materialized at the earliest.
Vermi-compost and Bio-Manure Programme
2.31 On 21.3.2002, the Regional Office at Visakhapatnam had conducted one awareness camp on
Vermi-compost/Bio-manure programme at Visakha Society for Prevention of Cruelty to Animals (VSPCA), Paradeshipalem Village, Madhuravada Mandal, Visakhapatnam District. 50 persons of the farming class had been covered under the training-***-awareness on Bio-manure/Vermi-compost. As a result of the above awareness programme, that office is receiving proposals to set up of Vermi-compost/Bio-manure programme units.
2.32 The Committee observes that proposals to set up vermi-compost/bio-manure need be
processed speedily and all kinds of assistance in this regard should be given including training to the entrepreneurs.
Village Industries Programme
2.33 The State of Andhra Pradesh is having rich mineral deposits. The KVI Board had financed the entrepreneurs in production of lime based products at Piduguralla Village, Guntur District, stone quarrying and crushing and stone carving particularly in Khammam, Kurnool and Ranga Reddy districts, decorative brass articles at Pembarthi of Warangal District, wooden toys at Etikoppaka of Visakhapatnam, Kondapalli wooden toys of Krishna District and Nirmal Toys of Adilabad District, jute products at Visakhapatnam District, palm gur and palm products at Nadadavolu of West Godavari District, mangojelly and pulp at West Godavari, East Godavari and Vizianagaram District, black metal items and lac bangles at Ranga Reddy and Hyderabad Districts.
2.34 The Committee observes that traditionally, the artisans of Andhra Pradesh from time immemorial belong to the weaker sections of society. Most of them are below poverty line. Crafts in Andhra Pradesh are surviving because of their skill. The Committee recommends that KVIC should help A.P. Khadi and V.I. Board to identify and help such talented artisans/craftsmen as the Andhra Pradesh Khadi and Village Industries Board has to play a major role in implementing the Village Industries programme. The Committee also recommends that KVIC should encourage APKVIB to take up schemes such as vermiculture, iodised salt, gum paper tape, screen printing, imitation jewellery and ancillary units of medium and small scale under automobile and engineering industry and implement them.
Khadi Programme
2.35 The Andhra Pradesh Khadi and Village Industries Board had financed 64 institutions for production of khadi cotton, muslin, silk and wool. 19 institutions are working and reporting progress. The Khadi Institutions are mainly manufacturing towels, bed sheets, dhotis, pant and shirting cloth, handkerchiefs, sarees, napkins, greencloth, etc. The Khadi Silk Programme is being successfully implemented in West Godavari, Kurnool, Cuddapah and Ananthapur Districts.
2.36 The Committee, however, observes that out of 64 institutions financed for production of khadi cotton, Muslin silk and wool only 19 institutions are reporting progress. This is a low turnout which requires immediate attention of APKVIB. KVIC should try to remove the bottlenecks in this regard so that all such institutions become functional.
Interest Subsidy Scheme
2.37 The KVI Board is also implementing the interest subsidy scheme as per the guidelines of the Khadi and Village Industries Commission. Under this scheme, units are funded by the financial institutions (Banks). The societies, institutions are required to pay interest at 4% per annum and the interest charged by the financial institutions over and above 4% would be subsidized by Khadi and Village Industries Commission. The Board so far subsidized 38 (35 Village Industries Institutions and 3 Khadi Institutions) institutions under this scheme with a Project Cost of Rs. 183.18 lakhs.
2.38 The Committee observes that KVIC should see that institutions implementing interest subsidy scheme monitored by APKVIC utilize the subsidy properly and achieve the desired goal. Their progress should be reviewed periodically and appropriate action be taken for the purpose.
Khadi and Village Industry in Karnataka
3. Karnataka State is one of the pioneering States in the country producing quality khadi. Some of the important khadi products produced in the State are cotton khadi, National Flag of Garag, silk khadi of Kolar and Mysore District, fine coating of Gadag and Hubli, muslin variety of Bijapur District, quality woollen of Ghataprabha, Sindholi of Belgaum District. The Khadi Programme is being implemented by both directly aided institutions of KVIC and the State Khadi and Village Industries Board (KVIB). In Karnataka there are 78 institutions directly listed under KVIC for implementation of Khadi Programme, out of which, 58 institutions are working. Under KVIB fold, out of 144 aided institutions, 121 are reported as working.
3.1 The Committee observes that Karnataka has the potential of producing speciality goods like National Flag of Garage, silk khadi of Kolar and Mysore, muslin of Bizapur which are unique. There is huge potential of export of these products. The Committee recommends that KVIC should promote district/regional level village industry federations consisting of artisans, district listed institutions and margin money beneficiaries.
Central Silver Plant, Chitradurga
3.2 To meet the raw material needs of local Khadi Institutions and also for the institutions in Southern States, the KVIC has established a "Central Silver Plant" at Chitradurga during the year 1992-93. The CSP supplies the quality roving/cotton to the institutions located in Karnataka and also to the institutions in Southern States.
In Karnataka all the institutions of KVIC and KVIB are purchasing roving/silver of cotton and polyvastra from CSP, Chitradurga from time to time.
3.3 The Committee recommends that more silver plants should be set up in the State to help Khadi programmes.
3.4 Karnataka State Khadi and Village Industries Board is one of the leading Board in the country serving the Khadi and Village Industries Sector in the State. The Board has shown remarkable progress in all the schemes assigned to it by both the State and Central Governments. Certain issues relating to Khadi and Village Industries Sector, require attention. The issues are :
(i) Extending Margin Money Scheme for exclusive KVI Retail Sales Outlets.
(ii) Extension of Interest Subsidy Scheme.
(iii) Modernisation of Cotton Khadi Production Centre.
(i) Extending Margin Money Scheme for opening exclusive KVI Retail Sales Outlets :
3.5 The Committee observes that Margin Money Scheme is at present being extended for establishing Industries, Business and Service ventures mainly in rural areas. This has resulted in creation of large capacities in production side without much support in marketing of products produced. Therefore, it is necessary to create forward linkages by supporting and assisting in marketability of the products. The Committee recommends that exclusive KVI retail sales outlets in urban and semi-urban areas should be opened by extending Margin Money assistance. If necessary, waiver of rural criteria as in the case of leather units should be done in which exemption is available to those leather units as are located in rural areas.
(ii) Extension of Interest Subsidy Eligibility Certificate to the units established under CBC and Margin Money Scheme :
3.6 The interest subsidy scheme is being in force for almost two decades. This scheme is not extended to the units established under CBC and Margin Money Scheme. There are quite a good number of units like Rice Mills, Dal Mills, Rava Mills, Stone Cutting and Polishing etc., which require huge working capital for the viability. In all these cases, the Committee observes the only one cycle requirement of working capital, has been provided with the presumption that units should avail remaining working capital from the Banks. The Committee, therefore, recommends that interest subsidy eligibility certificate should be extended to the units established under CBC and Margin Money Scheme.
(iii) Modernization of Cotton Khadi Production Centres :
3.7 The Committee came to know that a proposal has been prepared for modernization of cotton khadi production centres in Karnataka. This proposal envisages conversion of 1125 charkhas from the present 6 spindles to 8 spindles charkhas. The estimated cost of the proposal is Rs. 101.25 lakhs towards capital expenditure i.e., replacement of 6 spindle charkha by 8 spindle charkha and Rs. 54.64 lakhs interest subsidy on working capital to be borrowed from the financial institutions/banks. The Committee observes that the modernization of cotton khadi production centres will improve the productivity of Khadi Institutions and khadi artisans will be able to earn increased wages due to increased production. The Committee, therefore, recommends that proposal submitted to KVIC should be examined and the required amount under budgetary sources should be sanctioned without delay.
Extending Financial Support for Implementing Rural Employment Generation Programme (Margin Money Scheme)
3.8 The KVI Board has implemented REGP Programme under CBC scheme extending Rs. 117.25 crores assistance to 2453 units between 1995-96 and 1998-99. This has resulted in employment generation for over 26,000 persons. Now, the KVIB is implementing REGP scheme through Cooperative Banks and Private Sector Banks and KVIC – through Nationalized Banks. Since KVIB has offices throughout the State and also has sufficient manpower and expertise for successful implementation of the scheme, it should be given necessary funds to implement the programme directly.
3.9 The Committee recommends that sufficient funds be provided to Karnataka KVIB for providing direct loan and Margin Money assistance to the entrepreneurs willing to establish industries in rural areas at the earliest.
Cluster development programme and Common facility centre
3.10 Karnataka identified 13 potential clusters under village oil, pottery, bee keeping, agarbatti and
leather industries. In the first phase KVIC has sanctioned the clusters under Village Oil Industry in Bijapur in Karnataka.
3.11 The Committee was informed that this cluster is implemented by one of the Khadi Board Institutions i.e. The Gramodyog Yanni Utpadaka Sahakari Sangh Ltd., Bijapur. An amount of Rs. 97.00 lakhs was sanctioned in the first phase in favour of Sangh through Karnataka State Khadi and V.I. Board, out of which 29.07 lakhs has been released for construction of one workshed at Mohala Bogayath, Bijapur. Construction of work shed has been completed and awaiting for installation of machineries. 68 artisans (Telies) will be benefited under this cluster.
3.12 The Committee was apprised that Canara Bank Platinum Jubilee Rural Development Trust (CPJRDT), a subsidiary of Canara Bank, has come forward to implement the project in collaboration with KVIC. The CPJRDT has also got full-fledged Training Centre namely K.P.J. Prabhu Artisans, Training, Production and Marketing Centre at Joggerboddi, which is also nearer to Kudikebevoor. Necessary Memorandum of Understanding has already been entered by the KVIC with Canara Bank Rural Development Trust.
3.13 In the first phase the Commission has sanctioned Rs. 3,35,000 for the following inputs :
(a) Equipment
(b) Training expense
(c) Marketing support
Out of Rs. 3,35,000/- an amount of Rs. 3.01 lakhs has been released to the CPJRDT for effective implementation.
3.14 The Committee recommends that all avenues should be explored to build capacity of the existing traditional artisans and to introduce new technology in pottery under cluster programme like non-conventional energy programmes etc. Besides, product diversification, skill upgradation and establishing backward and forward linkages to these artisans should be followed up in the projects. Accordingly, appropriate training should be given to them.
Progress made under the Rural Employment Generation Programme (REGP)
3.15 Under REGP as far as Karnataka is concerned, a good progress has been made by sanctioning the projects by Grameena Banks and Nationalised Banks. The details are given below :
Progress made so far under the scheme as on 31.12.2001
(a) Total projects sanctioned (Nos.) = 5574
(b) Total Projects Cost = Rs. 59.04 crores
KVIC and KVIB have conducted 21 workshops for the year 2001-02 on REGP all over the State through District Level Bankers Committee for the Bank Managers. The details of REGP have been discussed at length in all these workshops for the benefit of the Branch Managers of nationalized and other banks.
3.16 KVIC has also conducted 100% physical verification of the Margin Money Units in the State of Karnataka during 1999-2000 and observed that 95% of the units are functioning well under the set up. Further, in addition to the above, physical verification for units financed during the year 2000-01 has been completed in 17 districts covering 900 units. It has been observed that around 94% of the units verified are functioning well.
Target for the Year 2002-03
3.17 The Commission has decided to decentralize the implementation of the REGP to State level from 1.4.2002. Accordingly the State Office has identified the Nodal Branches in respect of 7 major banks at Bangalore. KVIC has fixed 2440 project target for Karnataka State for 2002-03 with a financial allocation of margin money component of KVIC to the tune of Rs. 6.10 crores.
3.18 The Committee hopes that target for employment generation under the programme would be achieved satisfactorily by the Karnataka Khadi Village Industries Board and KVIC during the year 2002-03.
Khadi and Village Industries in Kerala
Problems
4. The Committee was, however, apprised that at the time of inception of the Margin Money Scheme, the KVI Board was permitted by the KVIC to implement the scheme uniformly through Cooperative Banks, Nationalized Banks, Private Sector Scheduled Banks, Regional Rural Banks and the Kerala Financial Corporation. But in July, 2000 the Commission unilaterally modified the procedure and accorded sanction to the Board to operate the scheme only with the specific approval of the Commission. Subsequently the Commission accorded specific approval to the Board to implement the scheme through all the implementing agencies except Kerala Financial Corporation. The approval in respect of Kerala Financial Corporation is pending with the Commission for a long time even though the Board has made available all the documents required by the Commission for the specific approval. It is reliably learnt that the Industrial Development Bank of India has raised some objection to allow the State Financial Corporation to advance loans to the beneficiaries under the Margin Money Scheme and this has posed a serious problem to the Board. Due to the non-receipt of approval to the Kerala Financial Corporation the Board is not in a position to provide Margin Money Assistance to 101 applications to the tune of Rs. 2.21 crore cleared by Kerala Financial Corporation.
4.1 The Committee was informed that the Kerala Khadi and Village Industries Board has so far financed 2009 cooperative societies, 2161 registered institutions, 15814 individuals and 426 departmental units. The Committee was further informed that funds allotted to the Board under Margin Money Scheme is very meagre and insufficient when compared to the number of applications for Margin Money Assistance received in the Board. As per the guidelines of Khadi and Village Industries Commission, the Board has to sanction the Margin Money to the beneficiaries, based on the project report approved by the banks. Most of the projects received in the Board under Margin Money Scheme involve huge project costs and smaller projects are almost always neglected. The Board would like to give priority to projects involving low project cost. As per letter No. REGP/M-211/2001-2002 dated 27.12.2001, the Khadi and Village Industries Commission has instructed the Board to give priority to smaller projects.
4.2 The Committee, therefore, recommends that discretion should be given to the Board to alter the projects approved by the Banks.
4.3 The Board has formed following six federations under the following village industries for the revival of sick units according technical and financial assistance to the member units, to fetch good market for their products.
(1) All Kerala Cottage Match Industries Federation, Kollam
(2) All Kerala Soap Industries Federation, Kozhikode
(3) Kerala State Rural Women's Electronic Industrial Cooperative Society, Thiruvananthapuram.
(4) Kerala State Bee Keeping Industries Federation, Thiruvananthapuram
(5) Kerala State Village Leather Units Welfare Federation, Thiruvananthapuram
(6) All Kerala Rubber Industries Federations, Kottayam.
4.4 The Committee appreciates the efforts made by Kerala Khadi and Village Industries Board for revival of sick units in the State and pro-active role played by it to provide financial and technical assistance to them. The Committee hopes that these efforts will help a lot in improving the condition of sick units in Kerala.
State Government Support to Khadi and Village Industries Sector
4.5 The State Government extends 10% rebate on retail sale of Khadi throughout the year. It purchases 75% of the total requirements of file boards and exempted 23 industries from sales tax. The State Government purchases bandage cloth for the use of hospitals from the Khadi and Handloom Sectors in the ratio 1 : 1. State Government has also introduced Incentive Scheme @ Ps. 10 per hank to khadi artisans and extends financial assistance under Plan for the Khadi Sector.
Welfare measures under Khadi Sector
4.6 The State Government has constituted a separate body viz. Kerala Khadi Workers Welfare Fund Board for the welfare of Khadi workers. The following benefits are extended to the Khadi workers by the Welfare Fund Board.
Benefits
1. Pension to khadi artisans with a minimum of Rs. 100/- and a maximum of Rs. 300/- per month on completion of 10 years of service or 60 years of age.
2. Medical assistance up to Rs. 750/- to an artisan to his/her dependent every year.
3. Maternity allowance of Rs. 750/- is given at the time of delivery, limited to times.
4. Educational benefit of Rs. 500/- for the children of an artisan for education after SSLC.
5. Educational benefit of Rs. 3000/- for courses such as engineering/medicine/ veterinary/agriculture to the children of artisans.
6. Educational cash awards to the toppers among the children of khadi workers at district level.
SSLC Rs. 1000/-, Rs. 750/-
PDC/Plus2 Rs. 1500/-, Rs. 1000
7. Funeral expense @ Rs. 500/- at the time of death of an artisan or dependent.
8. Permission to withdraw 50% of the deposited amount for purposes such as house construction, maintenance, purchase of land or vehicle, marriage of artisan/dependent.
9. Interest @ 9.5% to the welfare fund deposit.
4.7 The Committee observes that Kerala is a leading State in the welfare measures for khadi artisans. The State Khadi Workers' Welfare Fund is a model to be examined by other States for implementation. The State Government gives support to the Kerala Khadi and Village Industries Board by providing substantial funds under plan fund in addition to non-plan funds for salary and rebate. A rebate of 10% on the sale of khadi is available throughout the year. The State Government has introduced an incentive scheme to the khadi artisans @ 10 paisa per hank in weaving. Further, the State Government has reserved a portion of Khadi materials for the requirement of hospital to be procured from the Kerala Khadi and Village Industries Board. The Committee appreciates and recognizes the efforts of the State Government in extending support to Khadi and Village Sector.
Marketing
4.8 The Kerala Khadi and Village Industries Board is running 163 numbers of sales outlets. A considerable quantity of Khadi and Village Industries products produced by the Board and its aided units are being sold out through these outlets. Nowadays, Board is giving particular attention in opening more sales outlets under the direct control of the Board. The objective behind this is to dispose of the heavy accumulation of Khadi goods turned out in the production centres.
4.9 Out of the above, 9 sales outlets are run by the Director (Marketing) directly. In addition to this, the Project Officers are also running 20 of Khadi Grama Soubhagyas in all districts. There are 49 agency Bhavans and 84 numbers of Grama Soubhagyas attached to the production units. The total sales achieved during 2001-2002 from all the Grama Soubhagyas is Rs. 847.90 lakhs.
4.10 The Board has launched two types of readymade shirts with the brand name 'Summer cool' and 'Millenti'. It has great demand in Kerala. The Board is also thinking of supplying the products to other State Boards. Similarly the Board has a brand new product of honey named 'Naruthen'. The Board is thinking of exporting their brand products to outside the country, especially to the Middle East. A focal point will be set up in the Khadi and Village Industries Board shortly to explore possibilities of exporting Khadi and Village Industries products.
4.11 The Committee observes that the major concern in the field of marketing of Khadi products is the rebate policy of KVIC. The Committee hopes that the KVIC will announce its policy on time.
4.12 In the budget estimate for 2002-03 KVIC was requested to allot Rs. 40 lakhs for exhibition and Rs. 60 lakhs for renovation of existing sales outlets. For the expansion and renovation of existing outlets funds are required.
4.13 The Committee recommends that the funds demanded in the budget proposal for the above items for 2002-03 may be considered sympathetically.
Central Silver Plant, Kuttur, Trichur
4.14 The Khadi and Village Industries Commission (KVIC) has set up a Central Silver Plant (Muslin Project) at Kuttur, near Trichur for ensuring supply of silver/roving to the institutions of this State. The centre caters to the need of silver/roving to the institutions of West Bengal, Tamil Nadu, U.P., Andhra Pradesh, Maharashtra and Gujarat also. The total supply of roving within the State comes to around 2 lakh kgs., and that of outside the State comes to 1.40 lakh kgs. During 2001-02, the production of the unit was 3.69 lakh kgs. worth Rs. 441.00 lakhs. The actual sale was to the tune of 3.40 lakh kgs. for an amount of Rs. 419.00 lakhs. The accrued profit as on 31.3.2002 is to the extent of Rs. 176.15 lakhs. The total investment of the plant and machinery of the unit is Rs. 166.18 lakhs. The silver/roving is being supplied to the institutions on credit against the rebate payment so that the working capital is not blocked and ensured continued production.
4.15 The Committee observes that Kerala being a consumer State more silver plants on the pattern of Central Siler Plants, Kuttur, Trichur should be set up so that demands of the State of Khadi Products can be met.
Bio-Technology/Non-Conventional Energy Programme
4.16 "Bio-technology and Non-conventional Energy" is one of the major industries functioning in Kerala. Various programmes such as national project on biogas development, community/institutional and night-soil based higher capacity biogas plants etc. are being implemented as per the guidelines and financial support of the Ministry of Non-conventional Energy Sources. During 2001-02, 300 biogas plants, 3 Nos. of institutional and night soil based plants were installed. This will directly influence in reducing cooking fuel needs. Besides, this provides direct employment to 30-60 rural unemployed artisans. The subsidy rates varies from Rs. 1800/- to Rs. 2300/- per biogas plant and supervision charges to the Rural Energy Technicians to the tune of Rs. 700/- for each biogas plant.
4.17 KVIC is also engaged in development of "bio-manure". KVIC is extending technical expertise in disseminating various bio-manure techniques, bio-digested slurry etc. besides financial assistance under the scheme. So far half a dozen units have been installed and a good number of units are under different stages of installation.
4.18 The Committee appreciates the efforts of Kerala Khadi and Village Industries Board in developing bio-technology/non-conventional energy programme. The Committee hopes that action will be taken to install more such units in the State.
Rural Employment Generation Programme (REGP)
4.19 The REGP is being implemented in the State, with the active involvement of the State KVI Board and Public Sector Scheduled Commercial Banks. So far, 5246 Village Industries Projects have been set up in the State under the programme.
The Performance of State KVI Board
4.20 The State KVI Board aided agencies are actively involved in the implementation of REGP. KVIC has placed Rs. 14.19 crore Margin Money advance with the State KVI Board for speedy implementation of the programme. The Board has already sanctioned and released Margin Money Assistance to the tune of Rs. 14.18 crore to 1403 Village Industries Units generating employment opportunity to 11844 persons in rural sector. The Board is providing Margin Money Assistance to all industries included under the schedule of industries approved by Khadi and Village Industries Commission.
4.21 With a view to overcome the unemployment situation and to create additional employment opportunities in rural area, the Board is introducing certain dynamic programmes under Margin Money Scheme, in addition to the ongoing programmes. One of the prestigious programmes to be implemented by the Board is the introduction of "Cyber Cafe" in all Panchayats in Kerala. The Project envisages to set up Cyber Cafes in all 991 Grama Panchayats in Kerala with a specific objective of giving fillip to an IT based endeavour for rural development. The Board also proposes to impart a short-term training to the prospective entrepreneurs in this regard.
4.22 The Committee recommends that the Ministry of Agro and Rural Industries should help the Kerala Government to tap the inherent skills of the rural populace and transform them into economic assets for self-employment and higher earnings.
4.23 The Sub-Committee was informed that adequate attention is being paid to publicity of the following programmes :-
l Booklets, pamphlets have been printed and made available to the public.
l Spreading message through various forms like State Level Bankers Committee, District Level Bankers Committee and Block Level Bankers Committee.
l Periodical review meetings, conducting of seminars, workshops etc.
l Advertisement through newspapers, All India Radio and Doordarshan.
For promotional activities an amount of Rs. 25 lakh was sanctioned and released to the Board and the entire amount has been utilized.
4.24 The Committee is happy to note the painstaking efforts made by the Kerala KVIB and to popularize the scheme. The Committee appreciates the progress made in the direction.
Monitoring of the programme
4.25 The success of the scheme lies in the effective monitoring. In order to ensure that the scheme achieves its intended objective, monitoring Committees are constituted at two levels :-
l The State Government have constituted a State Level Task Force to oversee the implementation of Margin Money Scheme, with Special Secretary to Government, Industries Department as Chairman, Secretary, Kerala Khadi and Village Industries Board as Convenor and the representatives from the various implementing agencies as members. The Committee reviews the progress of the scheme in the State.
l For the speedy implementation of the Margin Money Scheme, the Government have constituted a District Level Task Force with the District Collector as Chairman and the Project Officer, Kerala Khadi and Village Industries Board as the Convenor. The Committee reviews the progress of the scheme at District Level.
4.26 The Committee recommends that REGP beneficiaries may be given I.T. based assistance so as to enable them to collect data relating to agro and rural based industries for formulating their own market strategy. The Committee further suggests that free of cost I.T. training may be provided to REGP beneficiaries.
Observations/Conclusions and Recommendations of the Committee at a Glance
The Committee observes that in order to identify the drawbacks in the functioning of the Khadi institutions and to take timely remedial measures, KVIC should closely monitor Khadi institutions under various categories like A, B, C and D especially those institutions whose functioning is not at the desired level. KVIC should ensure decentralization in decision making and delegation of more powers to State KVIB alongwith development of a strong monitoring system. (Para 2.4)
The Committee observes that Khadi sales pick up only when rebate is offered to the customers. Sans rebate, khadi sales have shown downward trend during the year. The Committee recommends that KVIC should encourage individual entrepreneurs to sell khadi products on commission basis. There should also be attempt to make the khadi products cheaper, qualitatively better and market competitive. (Para 2.6)
The Committee during the interactive session with KVIC/AP KVIB, was informed about the malpractices and mismanagement at various levels of the Khadi institutions. The Committee is of the view that this may be one of the reasons of cost of khadi going up and products being unaffordable. The Committee, therefore, recommends that certain in-house activities like concurrent evaluation, data collection etc. of these institutions should be verified by outside professional agencies. (Para 2.8)
The Committee observes that there is vast scope for implementation of the programmes like pottery (Mineral based industry), mango jelly (fruits and vegetables processing industry), palm gur, lime industry, beekeeping, carpentry and blacksmith, rural transport, processing of cereals and pulses, medicinal plants, paper bags conversion units, service sector industries, dhabas and fast food units under tourism, bio-manure. Under the UNDP training programme extraction of banana fibre programme is going to be organized by batches at Kasturba Gandhi National Memorial Trust, Seethanagaram, Rajahmundry, East Godavari District. There is need to explore their potential in the state as these areas have not been tapped. The Committee, therefore, recommends that efforts should be made by KVIC/KVIB to develop these programmes in the State on priority basis and realize their fullest potential. NGOs may also be invited and encouraged to popularize these programmes. (Para 2.11)
The Committee observes that cluster approaches need to be encouraged in a big way in the rural sector as it not only builds community spirit but also provides employment at a low cost. The Committee recommends that proposals sent by the State agencies for cluster forming like mango-jelly cluster, brass/copper cluster, palm fibre extraction cluster should be expedited at the Central office level to give a boost to the community programme. (Para 2.13)
The Committee observes that REGP is meant for lower strata of society, people of labour class who earn their bread on daily basis. The Committee recommends that every effort should be made to achieve the target for the year 2002-03 by the regional office, Visakhapatnam and more funds should be infused in the State for the scheme considering the number of such people in the State. (Para 2.18)
The Committee observes that EDP training to beneficiaries forms an important part of the village industries programmes. It is a sorry state of affairs that sanction for EDP programmes for 2001-02 and 2002-03 have not been received by the KVI office in Andhra Pradesh. The Committee views this seriously and recommends corrective action. (Para 2.20)
The Committee is constrained to note the denial of loan and margin money by the beneficiaries. The Committee observes that such loopholes need to be plugged to the KVIC/KVIB if village industries are to strengthened. (Para 2.24)
The Committee observes that there are no Departmental or non-Departmental Training Centres in the Andhra Pradesh. There is no training centre either under KVI Board. The officials of Regional Office, Andhra Pradesh are deputed to attend training outside the state. The Committee, therefore, recommends that training centres should be set up in the state so that maximum number of persons can be trained and benefit from the programmes. (Para 2.26)
The Committee is of the opinion that Marketing needs to be given new orientation. Marketing is the area where utmost attention has to be paid. In spite of providing some good quality products the marketing has been poor which has affected Khadi sales adversely. The Committee, therefore, recommends that sales outlets in the KVI sector should be modernized with proper computerized inventory management system. A joint advertisement campaign on cost sharing basis with KVIB and KVIC institutions should be started. If proper attention is paid to it and goods/products are branded and packaged, like private companies do, Khadi products can not only do good business in the domestic markets but also can be sold in international markets because there is good demand for some Khadi products like silk, cotton etc.(Para 2.28)
The Committee recommends that the proposal for quality control/testing lab on Khadi goods and yarn is in the interest of the industry and it should be materialized at the earliest. (Para 2.30)
The Committee observed that proposals to set up verm compost/bio-manure need be
processed speedily and all kind of assistance in this regard should be given including training to the entrepreneurs. (Para 2.32)
The Committee observes that traditionally, the artisans of Andhra Pradesh from time immemorial belong to the weaker sections of society. Most of them are below poverty line. Crafts in Andhra Pradesh are surviving because of their skill. The Committee recommends that KVIC should help A.P. Khadi and V.I. Board to identify and help such talented artisans/craftsmen as the Andhra Pradesh Khadi and Village Industries Board has to play a major role in implementing the Village Industries programme. The Committee also recommends that KVIC should encourage APKVIB to take up schemes such as vermiculture, iodised salt, gum paper tape, screen printing, imitation jewellery and ancillary units of medium and small scale under automobile and engineering industry and implement them. (Para 2.34)
The Committee, however, observes that out of 64 institutions financed for production of Khadi cotton, Muslim silk and wool only 19 institutions are reporting progress. This is a low turnout which requires immediate attention of APKVIB. KVIC should try to remove the bottlenecks in this regard so that all such institutions become functional.(Para 2.36)
The Committee observes that KVIC should see that institutions implementing interest subsidy scheme monitored by APKVIC utilize the subsidy properly and achieve the desired goal. Their progress should be reviewed periodically and appropriate action be taken for the purpose. (Para 2.38)
The Committee recommends that more silver plants should be set up in the state to help Khadi programmes. (Para 3.3)
The Committee observes that Margin Money Scheme is at present being extended for establishing Industries, Business and Service ventures mainly in rural areas. This has resulted in creation of large capacities in production side without much support in marketing of products produced. Therefore, it is necessary to create forward linkages by supporting and assisting in marketability of the products. The Committee recommends that exclusive KVI retail sales outlets in urban and semi-urban areas should be opened by extending Margin Money assistance. If necessary, waiver of rural criteria as in the case of leather units should be done in which exemption is available to those leather units as are located in rural areas. (Para 3.5)
The interest subsidy scheme is being in force for almost two decades. This scheme is not extended to the units established under CBC and Margin Money Scheme. There are quite a good number of units like Rice Mills, Dal Mills, Rava Mills, Stone Cutting and Polishing etc., which require huge working capital for the viability. In all these cases, the Committee observes the only one cycle requirement of working capital, has been provided with the presumption that units should avail remaining working capital from the Banks. The Committee, therefore, recommends that interest subsidy eligibility certificate should be extended to the units established under CBC and Margin Money Scheme. (Para 3.6)
The Committee came to know that a proposal has been prepared for modernization of cotton khadi production centres in Karnataka. This proposal envisages conversion of 1125 charakas from the present 6 spindles to 8 spindles charakas. The estimated cost of the proposal is Rs. 101.25 lakhs towards capital expenditure i.e., replacement of 6 spindle charaka by 8 spindle charaka and Rs. 54.64 lakhs interest subsidy on working capital to be borrowed from the financial institutions/Banks. The Committee observes that the modernization of cotton khadi production centres will improve the productivity of khadi institutions and khadi artisans will be able to earn increased wages due to increased production. The Committee, therefore, recommends that proposal submitted to KVIC should be examined and the required amount under budgetary sources should be sanctioned without delay. (Para 3.7)
The Committee recommends that sufficient funds be provided to Karnataka KVIB for providing direct loan and Margin Money assistance to the entrepreneurs willing to establish industries in rural areas at the earliest. (Para 3.9)
The Committee recommends that all avenues should be explored to build capacity of the existing traditional artisans and to introduce new technology in pottery under cluster programme like non-conventional energy programmes etc. Besides, product diversification, skill upgradation and establishing backward and forward linkages to these artisans should be followed up in the project. Accordingly, appropriate training should be given to them. (Para 3.14)
The Committee hopes that target for employment generation under the programme would be achieved satisfactorily by the Karnataka Khadi Village Industries Board and KVIC during the year 2002-03. (Para 3.19)
The Committee, therefore, recommends that discretion should be given to the Board to alter the projects approved by the Banks. (Para 4.2)
The Committee appreciates the efforts made by Kerala Khadi and Village Industries Board for revival of sick units in the state and pro-active role played by it to provide financial and technical assistance to them. The Committee hopes that these efforts will help a lot in improving the condition of sick units in Kerala. (Para 4.4)
The Committee observes that Kerala is a leading State in the welfare measures for Khadi artisans. The State Khadi Workers' Welfare Fund is a model to be examined by other State for implementation. The State Government gives support to the Kerala Khadi and Village Industries Board by providing substantial funds under plan fund in addition to non-plan funds for salary and rebate. A rebate of 10% on the sale of Khadi is available throughout the year. The State Government has introduced an incentive scheme to the Khadi artisans @ 10 paisa per hank in weaving. Further, the State Government has reserved a portion of Khadi materials for the requirement of hospital to be procured from the Kerala Khadi and Village Industries Board. The Committee appreciates and recognizes the efforts of the State Government in extending support to Khadi and Village Sector. (Para 4.7)
The Committee observes that the major concern in the field of marketing of Khadi products is the rebate policy of KVIC. The Committee hopes that the KVIC will announce its policy on time. (Para 4.11)
The Committee recommends that the funds demanded in the budget proposal for the above items for 2002-03 may be considered sympathetically. (Para 4.13)
The Committee observes that Kerala being a consumer state more silver plants on the pattern of Central Siler Plants, Kuttur, Trichur should be set up so that demands of the State for Khadi Products can be met. (Para 4.15)
The Committee appreciates the efforts of Kerala Khadi and Village Industries Board in developing Bio-technology/non-conventional energy programme. The Committee hopes that action will be taken to install more such units in the state. (Para 4.18)
The Committee recommends that the Ministry of Agro and Rural Industries should help the Kerala Government to tap the inherent skills of the rural populace and transform them into economic assets for self-employment and higher earnings. (Para 4.22)
The Committee is happy to note the painstaking efforts made by the Kerala KVIB and to popularize the scheme. The Committee appreciates the progress made in the direction (Para 4.24)
Minutes
XIII
Thirteenth Meeting
The Committee met at 3.30 p.m. on Wednesday, the 11th December, 2002 in Room No. 62, First Floor, Parliament House, New Delhi.
1.Dr. P.C. Alexander — Chairman
Rajya Sabha
2. Prof. M.M. Agarwal
3. Shrimati Sumitra Mahajan
4.Shri P.K. Maheshwari
LOK SABHA
5. Shri Nepal Chandra Das
6. Shri A.C. Jose
7. Shri Ram Singh Kaswan
8. Shri A. Narendra
9. Shri Ananta Nayak
10. Shri Malyala Rajaiah
11. Shri P. Rajendran
12. Dr. B.B. Ramaiah
13. Shri Tarachand Sahu
14. Chowdhary Talib Hussain
Secretariat
Shri Tapas Das Gupta, Joint Secretary
Shri D.P. Ahuja, Under Secretary
Shri Rakesh Naithani, Committee Officer
2. At the outset the Chairman welcomed the Members and apprised them of agenda for the meeting
of the day.
3. The Committee thereafter, took up auto policy for discussion. The Chairman apprised the Members that the Parliamentary Standing Committee on Industry had recommended in its 59th Report that the Government should formulate an Auto Policy in view of the ongoing liberalization of the economy and W.T.O. Obligations. In response to the Committee's recommendations the Department of Heavy Industries in its Action Taken Note has informed the Committee that Government of India has brought out an Auto Policy on 7th March, 2002.
3.1 The Chairman stated that the Committee on Industry took up the auto policy for detailed discussion as the policy laid down certain recommendations for the growth of the Industry. Since most of these recommendations required actions by the Ministries other than the Department of Heavy Industries and so far these recommendations had not been translated into real Government Policy.
3.2. The Chairman apprised the Members that the Committee had already taken up the matter for discussion and in this regard the Committee had held two meetings on 24th June and 16th July, 2002. Based on the discussion held on 24th June, 2002 a questionnaire was prepared and replies thereon was obtained from Department of Heavy Industries. In the meeting held on 16th July, 2002 the Committee had interacted with Automotive Research Association of India (ARAI); Society of India Automobiles Manufacturers (SIAM); Automotive Tyre Manufacturers Association (ATMA); and Automotive Component Manufacturers Association (ACMA); Prozon Inc. (manufacture of Fuel saver). Apprising the Members the details of discussion held in these two meetings, the Chairman spelt out the scope for discussion in auto policy which inter-alia included import of second hand imported cars; lack of testing facilities; foreign direct investment, research and development; construction of bus-body building, terminal life policy, lifting of quantitative restriction; Using spurious items and related 'e' mark issue; excise duty on tyre and concession on import tyre; Ban on used tyre; difficulties due to octroi on 5-6 States, switching over from Tube tyre to tubeless tyre; encouragement to small car industries; infrastructure import tariff; environmental aspects etc.
3.3 The Committee, thereafter, discussed in details the aims of Auto Policy which aimed at to promote integrated, phased, enduring and self-sustained growth of the Indian Automobile Industry. The Committee discussed also the objective of Auto Policy which inter-alia include promotion of a globally competitive automotive industry; Exalting the sector as a lever of industrial growth and an employment; Establishment of an international hub for manufacturing small affordable passenger cars and key centre for manufacturing Tractors and Two wheelers in the world; Ensuing a balanced transition to open trade at a minimal risk to the Indian Economy and local industry; Modernisation of the industry by facilitating indigenous design, research and development; Steering up India's software industry into automotive technology; Development of domestic safety and environmental standard at par with international standards; assisting development of vehicles propelled by alternative energy sources.
4. * * *
4.1 After a brief discussion all Reports were adopted unanimously without any modification.
5. The Committee then adjourned at 5.10 p.m.
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*** Relates to other matter.