Khadi Gramodyog Vikas Yojana: Khadi Vikas Yojana
20–35% subsidy on Khadi production cost · interest subsidy · India
Khadi artisans and KVIC/KVIB-registered institutions can access an umbrella of financial support for Khadi production subsidies, interest-capped loans, workshed construction, and marketing upgrades under this central government scheme. It covers everything from a 4% interest rate cap on bank loans to up to ₹25 lakh for renovating sales outlets. Apply online through the KVIC portal at kviconline.gov.in.
About This Scheme
Khadi artisans and KVIC/KVIB-registered institutions can access an umbrella of financial support for Khadi production subsidies, interest-capped loans, workshed construction, and marketing upgrades under this central government scheme. It covers everything from a 4% interest rate cap on bank loans to up to ₹25 lakh for renovating sales outlets. Apply online through the KVIC portal at kviconline.gov.in.
Full official description
The scheme "Khadi Vikas Yojana" is an umbrella scheme under "Khadi Gramodyog Vikas Yojana" and has been implemented by the Khadi and Village Industries Commission (KVIC), Ministry of Micro, Small and Medium Enterprises (MSME), Governemnt of India. It aims to support Khadi institutions and artisans by providing financial assistance, infrastructure development, interest subsidy, and marketing support. The scheme offers subsidies on Khadi production, reduces the interest burden on bank loans, facilitates the construction of worksheds for artisans, strengthens existing weak Khadi institutions, and enhances marketing infrastructure, including the renovation and modernization of sales outlets. Additionally, the scheme supports quality assurance initiatives, exhibitions, science and technology interventions, and the establishment of Centres of Excellence for Khadi
Benefits
- Production subsidy: 35% on prime cost for Cotton/Wool Khadi; 20% for Silk Khadi
- Interest rate capped at 4% on institutional bank loans (government pays the difference)
- Individual workshed grant: up to ₹1,20,000 or 75% of cost (whichever is less)
- Group workshed grant: up to ₹80,000 or 75% of cost
- Up to ₹15 lakh for reviving weak Khadi institutions
- Up to ₹25 lakh for renovating Khadi marketing/sales outlets
💡 Why Startups Should Care
The combination of a production subsidy (up to 35% on cotton/wool Khadi) and separate interest subsidy eligibility makes this scheme a comprehensive support package for Khadi institutions balancing both working capital and production costs.
Who Can Apply (Eligibility)
- Must be a Khadi artisan or Khadi Institution registered with KVIC or KVIB
- Age between 18 and 55 years (for individual artisans)
- Only one person per family is eligible
- Must not have received similar government benefits for the same purpose from any other scheme
- Priority for SC/ST, women, unemployed youth, and BPL applicants
How to Apply
- Visit the official KVIC website (kviconline.gov.in) to apply.
- Register your Khadi institution on the KVIC online portal.
- Submit Khadi artisan card or institution registration certificate.
- Apply separately for the Interest Subsidy Eligibility Certificate if seeking loan-linked benefits.
- Subsidies are disbursed after production and sales verification.
Frequently Asked Questions
What is Khadi Vikas Yojana (KGVY)?
Khadi Vikas Yojana is a Government of India scheme implemented by the Khadi and Village Industries Commission (KVIC) to promote Khadi production, improve artisan livelihoods, strengthen Khadi institutions, and expand marketing and exports of Khadi products.
What financial assistance is provided under the scheme?
The scheme provides production subsidy under Modified Market Development Assistance (MMDA), interest subsidy through the Interest Subsidy Eligibility Certificate (ISEC), assistance for worksheds, revival of weak institutions, and support for marketing infrastructure.
What is Modified Market Development Assistance (MMDA)?
MMDA provides subsidy of 35% on the prime cost for Cotton, Muslin, Wool, and Polyvastra Khadi, and 20% for Silk Khadi, helping institutions reduce production costs and increase artisan wages.
What is the ISEC scheme under KGVY?
Under the Interest Subsidy Eligibility Certificate (ISEC) scheme, Khadi institutions pay only 4% interest on bank loans, while the remaining interest is borne by KVIC as a subsidy.
What support is given for worksheds?
The scheme provides financial assistance for individual and group worksheds for Khadi artisans, including toilets, to improve working conditions and productivity, with higher assistance for the North Eastern Region.
Is there support for weak Khadi institutions?
Yes, financial assistance up to ₹15 lakh is provided for the revival of existing weak Khadi institutions, covering capital expenditure and working capital requirements.
Does the scheme support marketing infrastructure?
The scheme supports renovation and modernization of departmental and institutional sales outlets, with financial assistance up to ₹25 lakh, to improve product display and customer outreach.
Are there any additional components under the scheme?
Yes, the scheme includes support for Khadi quality assurance, exhibitions, science and technology initiatives, and the establishment of Centres of Excellence for Khadi.
What is the age limit for applicants?
Applicants must be between 18 and 55 years of age and must possess valid identity proof such as an Aadhaar card or other government-issued ID.
Can more than one person from a family apply?
No, only one person from one family is eligible to receive assistance under Khadi Vikas Yojana.
Ready to apply?
Visit the official government portal to apply for this scheme.
Apply on myScheme.gov.inDocuments Required
- Aadhaar card or other government-issued identity proof
- Age proof document
- Khadi artisan card or Khadi Institution registration certificate
- Bank account details
- Caste certificate (if applicable)