Press Information Bureau
Government of India
Ministry of Micro,Small & Medium Enterprises
19-November-2010 16:17 IST
Discount on Khadi Clothes
The Ministry of Micro, Small and Medium Enterprises had a policy of announcing reimbursement of rebate on sale of khadi and polyvastra on a year-to-year basis upto 20% on value of sales that was passed on to customers by the khadi institutions (10% normal rebate throughout the year on most of the khadi and polyvastra items and an additional 10% special rebate for 108 days coinciding with Gandhi Jayanti/local festivals). The system of rebate on sales of khadi and polyvastra under which khadi institutions as well as other authorized sales outlets were reimbursed the rebate passed on to customers has been replaced with effect from 1 April 2010 with the approval of the Cabinet Committee on Economic Affairs with a more focused, flexible, growth stimulating and artisan-centric scheme of Market Development Assistance (MDA) at 20% of the value of production of khadi and polyvastra for implementation by the Khadi and Village Industries Commission (KVIC) during 2010-11 and 2011-12. This initiative was necessitated for ensuring that spinners and weavers also get a part of the assistance while providing flexibility to the institutions to offer discount to customers. Under the new system of MDA, institutions can now utilize the amount of assistance on activities needed to enhance productivity and sales of khadi and polyvastra including providing discount to customers. KVIC has reported that most institutions have, to start with, declared a 15% discount at the institutional level, utilizing the benefits under MDA as well as other sources. There is no bar on State Governments declaring additional discount/rebate for promotion of sales of khadi and polyvastra.

This information was given by the Minister of State (Independent Charge) for Micro, Small and Medium Enterprises, Shri Dinsha Patel in a written reply to a question in the Rajya Sabha today.