Market Development Assistance (MDA) Scheme for Khadi and Polyvastra
Objectives
Based on the recommendations of the High Power Committee headed by the
then Prime Minister in 1994, Pant Committee Report of 2001, and the Expert
Committee Report of 2005 followed by pilot projects, and consultations with
stakeholders, the scheme of providing rebate on sales of khadi has been replaced
with effect from April 1, 2010 with the approval of the Cabinet Committee on
Economic Affairs with
a more flexible, growth stimulating and artisan-centric scheme of Market
Development Assistance (MDA) on production of khadi for implementation by the
Khadi and Village Industries Commission (KVIC) during 2010-11 and 2011-12.
The scheme provides for financial assistance to khadi institutions @ 20% of
production value on khadi and polyvastra to be shared among artisans, producing
institutions and selling institutions in the ratio 25:30:45. The guidelines of the
scheme are available on the KVIC’s website www.kvic.org.in. Under the new
system of MDA, sales are expected to be evenly spread throughout the year, and
the institutions will have the flexibility to use the assistance as per their actual
needs and priorities to improve production and marketing infrastructure such as
improving the outlets, designing products as per market demands or even giving
incentives to customers, etc.
Salient Features
The newly introduced MDA scheme makes it mandatory for the institutions to
pass on 25% of the total MDA to the spinners and weavers as incentive or bonus
in addition to their wages through their bank accounts or post office accounts
which facility did not exist under the rebate scheme. Sales are also expected to
be spread
across the year under MDA Scheme and would not get restricted to only 108 days
as used to happen under rebate scheme. The erstwhile scheme of rebate on
sales usually caused delay in release of rebate claimed by the institutions as they
had to wait firstly till completion of sale and then wait further till the ensuing year
to get the claims reimbursed after completion of audit, wherever required. Under
MDA, incentives would be provided the same year, after the end of the quarter of
production and this is expected to ease the working capital situation of the
institutions by ensuring immediate liquidity which would in turn ensure timely
payment to the artisans.
Objectives
Based on the recommendations of the High Power Committee headed by the
then Prime Minister in 1994, Pant Committee Report of 2001, and the Expert
Committee Report of 2005 followed by pilot projects, and consultations with
stakeholders, the scheme of providing rebate on sales of khadi has been replaced
with effect from April 1, 2010 with the approval of the Cabinet Committee on
Economic Affairs with
a more flexible, growth stimulating and artisan-centric scheme of Market
Development Assistance (MDA) on production of khadi for implementation by the
Khadi and Village Industries Commission (KVIC) during 2010-11 and 2011-12.
The scheme provides for financial assistance to khadi institutions @ 20% of
production value on khadi and polyvastra to be shared among artisans, producing
institutions and selling institutions in the ratio 25:30:45. The guidelines of the
scheme are available on the KVIC’s website www.kvic.org.in. Under the new
system of MDA, sales are expected to be evenly spread throughout the year, and
the institutions will have the flexibility to use the assistance as per their actual
needs and priorities to improve production and marketing infrastructure such as
improving the outlets, designing products as per market demands or even giving
incentives to customers, etc.
Salient Features
The newly introduced MDA scheme makes it mandatory for the institutions to
pass on 25% of the total MDA to the spinners and weavers as incentive or bonus
in addition to their wages through their bank accounts or post office accounts
which facility did not exist under the rebate scheme. Sales are also expected to
be spread
across the year under MDA Scheme and would not get restricted to only 108 days
as used to happen under rebate scheme. The erstwhile scheme of rebate on
sales usually caused delay in release of rebate claimed by the institutions as they
had to wait firstly till completion of sale and then wait further till the ensuing year
to get the claims reimbursed after completion of audit, wherever required. Under
MDA, incentives would be provided the same year, after the end of the quarter of
production and this is expected to ease the working capital situation of the
institutions by ensuring immediate liquidity which would in turn ensure timely
payment to the artisans.
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