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Amendments in the Khadi and Village Industries Commission Act, 1956

Amendments in the Khadi and Village Industries Commission Act, 1956
Start Date :
Oct 22, 2025
Last Date :
Nov 22, 2025
17:45 PM IST (GMT +5.30 Hrs)

To institutionalize the development of the Khadi and Village Industries sector, the Government of India first constituted the All India Khadi and Village Industries Board in 1953. ...

To institutionalize the development of the Khadi and Village Industries sector, the Government of India first constituted the All India Khadi and Village Industries Board in 1953. This was followed by the enactment of the Khadi and Village Industries Commission Act, 1956 (No. 61 of 1956), which inter alia provides for the establishment of the Khadi and Village Industries Commission (KVIC) as a statutory body.

KVIC is entrusted with the responsibility to plan, promote, facilitate, organize, and assist in the establishment and development of Khadi and Village Industries in rural areas, in coordination with other agencies engaged in rural development.

In view of evolving market dynamics, technological advancements, and the need to further strengthen support systems, certain provisions of the KVIC Act, last amended in 2006, require updating. A comprehensive amendment is proposed to align the legislative framework with current sectoral needs and to enhance KVIC’s role as a facilitator of growth, innovation, and sustainable village industries.

To strengthen and modernize the Khadi and Village Industries sector, the Ministry of Micro, Small & Medium Enterprises (MSME) in collaboration with MyGov invites citizens to share their views on the proposed Amendments to the Khadi and Village Industries Commission Act, 1956.

The Ministry of MSME is in the process of amending the KVIC Act, 1956. In this regard, this Ministry is being consulted by various central Ministries/Department. The amendments proposed in the KVIC Act, 1956, are based on the following three key pillars:
(a) Diversification and adoption of New Technology
(b) Formalization of Village Industries
(c) Inclusivity and Institutional Strengthening

(a) Diversification and Adoption of New Technology
(i) Make provision for the adoption of any emerging form of fabric in the KVI Sector.
(ii) Adoption of clean energy, like Solar energy, in Khadi production while retaining the sector's authenticity.

(b) Formalization of Village Industries
(i) Align the "Village Industry" definition with the micro-enterprise classification under the MSME Act, based on investment and turnover thresholds.
(ii) Update the Schedule of Village Industries to allow inclusion of emerging activities aligned with market trends, rural entrepreneurship, and technology-led enterprises.
(iii) To make provisions to facilitate Udyam Registration for village industries and align the Village Industries with the National Industrial Classification Code (NIC Code).

(c) Inclusivity and Institutional Strengthening
(i) To include representation of women, weaker sections (SC/ST/OBC) and contemporary expertise in the Commission’s composition
(ii) To open up the Khadi Sector for new entities.
(iii) To include the rule making power in the functions of the Commission.

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Showing 144 Submission(s)
Swetha Kannan
Swetha Kannan 10 hours 34 minutes ago

2. As per my knowledge cotton clothes I can see more in khadi. That suits in hot climates. Not sure, for cold climate khadi products suits. So promoting khadi products relevant to climate needs as well. Similarly we can export to hot climate countries etc. Need to validate and take it.

Swetha Kannan
Swetha Kannan 10 hours 36 minutes ago

suggestions
1. We can see every state different material even every district. Like GI tag, we can have different states products and promote those. Like via advertisements in tv, social media and spreading word about that. Like one station one product , similarly "one state one khadi" kind

user_366270
user_366270 16 hours 32 minutes ago

​2. Expansion of Functions and Scope

​Broadening Developmental Role (Section 15): The original function to "plan, promote, organise" was expanded to "plan, promote, facilitate, organise and assist" in the establishment and development of khadi and village industries. The addition of "facilitate" emphasized the Commission's role in easing the business environment for KVI institutions.

​Enhanced Implementation Mechanism: The Commission was empowered to perform its functions, such as planning, organizing training, and building reserves of raw materials, "directly or through specified agencies." This flexibility allowed KVIC to coordinate with a wider network of institutions for program implementation.

​3. Defining 'Village Industry' and Capital Limits

​Revision of Capital Investment Limit (Section 2(h)): The Amendment revised the definition of "village industry" by increasing the limit on fixed capital investment per artisan/worker.

user_366270
user_366270 16 hours 33 minutes ago

Restructuring the Commission and Its Expertise

​Composition Overhaul (Section 4): The Amendment significantly changed the composition of the Commission to bring in greater professional expertise.

​It mandated the appointment of six non-official members who must have specialized knowledge and not less than ten years of experience in khadi or village industries, each representing one of the six geographical zones of the country.

​It introduced four non-official members specifically chosen from distinct professional disciplines: one with expertise in Science and Technology, one in Marketing, one in Rural Development, and one in Technical fields. This was a crucial step to infuse modern business and technical acumen into KVIC's core functioning.

​Establishment of Zonal Committees (New Section 4A): The Act provided for the establishment of Zonal Committees to function as a forum for consultation and a conduit for disseminating information and schemes for khadi and village industries.

user_366270
user_366270 16 hours 34 minutes ago

in the Board's operation. Further amendments have focused on issues like the appointment of a Financial Adviser and Chief Accounts Officer and the recovery of loans and dues. Recent discussions also include stricter regulations for minimum wage standards and social security for artisans, as well as establishing a dedicated grievance redressal mechanism to enhance transparency.

​These amendments collectively aim to facilitate the growth of Khadi and Village Industries, promoting them as viable sources of employment and income in rural areas while adapting the regulatory framework to modern business practices.
The Khadi and Village Industries Commission (Amendment) Act, 2006

​The Khadi and Village Industries Commission (Amendment) Act, 2006, was a landmark revision aimed at modernizing the Commission and its functioning. The changes focused heavily on updating the organizational structure and widening the scope of its developmental activities.

user_366270
user_366270 16 hours 35 minutes ago

to include new and emerging market-aligned activities, rural entrepreneurship, and technology-led enterprises.

​Technological Adoption and Diversification: Efforts have been made, or proposed, to formally make provision for the adoption of new technology and clean energy (like solar energy) in Khadi production, while ensuring the sector's authenticity is maintained. This also includes diversifying and adopting any emerging forms of fabric in the KVI Sector.

​Institutional Strengthening and Inclusivity: Proposed changes often aim to strengthen the Commission's composition by including greater representation of women and weaker sections (SC/ST/OBC), along with contemporary expertise. There have also been proposals to include the rule-making power in the functions of the Commission and to simplify the process for new entities to enter the Khadi Sector.

​Financial and Regulatory Measures: Earlier amendments, such as the one in 1961, addressed procedural and financial difficulties

user_366270
user_366270 16 hours 36 minutes ago

The Khadi and Village Industries Commission (KVIC) Act, 1956, has been amended several times to adapt to changing economic and technological environments. A significant amendment was the Khadi and Village Industries Commission (Amendment) Act, 2006, which aimed to address practical difficulties and streamline the working of the Commission.

​🏛️ Key Amendments and Proposed Changes

​One of the most notable acts was the Khadi and Village Industries Commission (Amendment) Act, 2006. While the specific, comprehensive details of all changes are extensive, the general intent of amendments and proposed changes often revolve around modernization and expanding the scope of the KVIC:

​Modernizing Definitions: Amendments often focus on updating the definition of "Village Industry" to align with contemporary micro-enterprise classifications, such as those under the MSME Act, based on thresholds like investment and turnover. There's also a push to update the Schedule of Village Industries.

Pankaj Kumar Mahto
Pankaj Kumar Mahto 20 hours 36 minutes ago

The *Khadi and Village Industries Commission Act, 1956* is an Indian law that established the *KVIC (Khadi and Village Industries Commission)* to promote and develop khadi and village industries in rural areas.

*Key Features of the Act:*

1. *Establishment of KVIC:*
- A statutory body under the *Ministry of Micro, Small and Medium Enterprises (MSME)*.
- Set up in *1957* under the 1956 Act.

2. *Objectives:*
- Plan, promote, organize, and assist in the development of *khadi* (hand-spun cloth) and *village industries*.
- Provide employment in rural areas.
- Promote self-reliance and sustainable livelihoods.

3. *Functions:*
- Provide financial assistance and subsidies.
- Conduct training and research.
- Supply raw materials and marketing support.
- Develop cooperative societies and institutions.

4. *Governance:*
- The Commission includes a *Chairperson* and members appointed by the Central Government.

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