The Khadi and Village Industries Commission (KVIC) is in talks with the Asian Development Bank (ADB) to receive a loan of Rs 600 crore, two years after it conveyed its financial needs to the finance ministry.
KVIC, in 2006, had written to the finance ministry about the need of funds to improve the technology used by around 5,000 units and increase their productivity. The ministry considered the request and wrote to ADB, which came forward to help KVIC in its quest to introduce updated technology.
?The money will be utilised for technological upgrade of over 300 khadi and village industrial units,? Dinesh Rai, secretary ministry of micro small and medium enterprises said. The sector has around 5,000 units that employ nearly one crore people.
?Over nine lakh workers in the sector use outdated equipment, which affects capacity building and increase in their supplementary income. With this assistance, the situation is likely to improve,? another senior official in the MSME ministry said. ?At present, ADB and KVIC are discussing the project report and forming the strategy to go ahead with it (upgrading the technology),? he added.
KVIC is a statutory body set up with an objective of providing employment in rural areas and creating self-reliance among the poor. It also undertakes marketing of products like stationary, bodycare food items and clothing through its more than 7,050 outlets across the country. The institution also operates via franchisee model.
The government has allocated Rs 1,200 crore to the institution in the Budget for this fiscal and has entrusted it to create 6 lakh more job opportunities and set up one lakh additional units.
KVIC is also the nodal agency to implement the Prime Minister?s Employment Generation Programme, a credit-linked and national scheme launched to generate employment opportunities through establishment of micro enterprises in rural and urban areas of the country.