Modified Market Development Assistance Scheme
The Modified Market Development Assistance (MMDA) scheme by KVIC provides financial assistance to registered Khadi institutions, artisans, and workers based on a percentage of the production cost. It funds technology upgrades for institutions, direct incentive payments to artisans via bank transfer, and market development for selling outlets. Submit quarterly claims online at kviconline.gov.in within 15 days of each quarter ending.
About This Scheme
The Modified Market Development Assistance (MMDA) scheme by KVIC provides financial assistance to registered Khadi institutions, artisans, and workers based on a percentage of the production cost. It funds technology upgrades for institutions, direct incentive payments to artisans via bank transfer, and market development for selling outlets. Submit quarterly claims online at kviconline.gov.in within 15 days of each quarter ending.
Full official description
The scheme "Modified Market Development Assistance Scheme" was launched on 1st April 2010 by the Ministry of Micro, Small & Medium Enterprises (MSME), Government of India. The scheme aims to rationalize financial assistance, promote market segmentation, strengthen marketing networks, and provide incentives to artisans and Karyakartas. The scheme provides financial assistance, calculated at 35% on Prime Cost for Khadi (Cotton, Muslin, Wool) and Polyvastra, and 20% on Prime Cost for Silk Khadi, distributed among producing institutions, selling institutions, artisans, and Karyakartas. This assistance supports technology upgradation, engaging design consultants, value addition, modernization and computerization of sales outlets, and direct incentives to artisans and Karyakartas, thereby improving production and sales of Khadi. The scheme is implemented by the Khadi and Village Industries Commission (KVIC), primarily through its Directorate of Khadi. The applications for this scheme are accepted online.
Benefits
- 35% of prime cost as MMDA for Cotton/Wool/Polyvastra Khadi; 20% for Silk Khadi
- Artisans (spinners & weavers) receive 35% of the MMDA directly to their Aadhaar-linked bank account
- Karyakartas (production & sales staff) receive 14% of MMDA as bonus (capped at ₹10,000/quarter for Silk)
- Producing institutions get 34% for technology upgrades, new designs, and quality tools
- Selling institutions get 17% for modernizing shops, exhibitions, and sales promotion
- Composite institutions (produce + sell) receive 51% of MMDA
Who Can Apply (Eligibility)
- Must be a registered Khadi Institution (Producing, Selling, or Composite)
- Must be affiliated with KVIC or State/UT Khadi and Village Industries Boards
- Must hold valid Khadi/Polyvastra Certificate and Khadi Mark Certificate
- Must have KVIC-approved annual budget
- Must maintain a separate bank account for MMDA funds
- Claims must be submitted within 15 days of each quarter end (Jul 15, Oct 15, Jan 15, Apr 15)
Exclusions
- The production of Khadi and Polyvastra products for Government supplies under Rate Contract (RC) of DGS&D is not eligible for the full Modified Market Development Assistance, as these items are not sold through retail outlets.
- However, artisans and Karyakartas of Khadi Institutions engaged in such production and supply are eligible for a specific MMDA incentive.
How to Apply
Registration Process
Step 1: Visit the 'KVIC Online' Portal of the Khadi and Village Industries Commission. This portal serves as the primary interface for submitting quarterly claims. Step 2: Click on "New Registration? Click Here". On the next page, click "Online Registration of Khadi Institutions". You will be taken to the registration page. Step 3: In the registration form, fill in all the mandatory fields and upload all the mandatory documents in the specified format and size. If required, verify your Email ID and Mobile Number via OTP. Step 4: The following details will be sent to your registered Mobile Number an Email ID:
- Username and Password.
- Unique ID.
- Acknowledgement Letter.
Claim Application Process
Step 1: Visit the 'KVIC Online' Portal of the Khadi and Village Industries Commission.
Step 2: Use the credentials you created during registration to log in. In the right pane, click "MMDA". Navigate to the application form for quarterly claim.
Step 3: In the form, fill in all the mandatory fields and upload all the mandatory documents in the specified format and size.
Step 4: Carefully review all the information provided and the documents uploaded. Make any necessary corrections.
Step 5: Acknowledge and agree to the terms and conditions / declaration (if any) by ticking the designated checkbox. Click "Submit" to submit your quarterly claim. You'll receive a confirmation message.
*These claims must be submitted within 15 days of the completion of the quarter through the online MDA processing system of KVIC.
*The specific submission deadlines are July 15th for Quarter I, October 15th for Quarter II, January 15th for Quarter III, and April 15th for Quarter IV.
*Claims not submitted within this stipulated timeframe will be forfeited and returned.
*Applicants are advised to save a copy of their submitted claims and any acknowledgment receipts for future reference.
Post-Application Processes
Step 1:**** Processing and Recommendation by State/Divisional Directors
- All claims received by the State/Divisional Directors of KVIC are processed for the release of Modified Market Development Assistance on a daily basis.
- The State/Divisional Directors must complete their recommendation to the Directorate of Khadi through the online MDA processing system of KVIC within 7 working days.
Step 2:**** Scrutiny and Recommendation by Directorate of Khadi
- Upon receiving the recommended claims from the field offices, the Directorate of Khadi is responsible for scrutinizing them.
- The Directorate of Khadi must then recommend these claims to the Directorate of Accounts within 7 working days through the online system.
Step 3:**** Fund Release by Directorate of Accounts
- The Directorate of Accounts, after receiving recommendations from the Directorate of Khadi, will process and release the Modified Market Development Assistance payments.
- The funds will be disbursed directly to the respective institution's bank account and artisans' Aadhaar-linked bank or post office accounts within 5 working days.
Frequently Asked Questions
What percentage of financial assistance is calculated on Prime Cost for Cotton, Muslin, and Wool Khadi products under this market development program?
The Modified Market Development Assistance is calculated at 35% on Prime Cost for Khadi (Cotton, Muslin, Wool) and Polyvastra products.
How much of the total assistance amount do artisans like spinners and weavers receive as direct incentive for Cotton and Woolen Khadi production?
Artisans including spinners and weavers receive 35% of the total Modified Market Development Assistance amount as incentive or bonus through their Aadhaar-seeded bank or post office accounts.
What specific costs are excluded when calculating the Prime Cost for determining the financial assistance under this market development scheme?
Prime Cost excludes establishment margin, trade margin, insurance, and bank interest, covering only raw material cost plus conversion charges up to grey cloth plus processing charges.
Can institutions engaged in both production and selling activities receive assistance under this scheme, and what percentage do they get?
Yes, Composite Institutions involved in both production and selling activities receive 51% of the Modified Market Development Assistance amount for Cotton, Woolen, and Polyvastra Khadi.
What is the maximum quarterly limit for Karyakartas receiving incentive payments under the Silk Khadi category of this assistance program?
Karyakartas in Silk Khadi category receive 10% of the total Modified Market Development Assistance amount with a maximum ceiling of ₹10,000/- per quarter per Karyakartha, whichever is less.
How frequently are the Modified Market Development Assistance funds released to institutions and artisans under this financial support program?
Funds are released on a quarterly basis based on actual claims settled in the previous quarter through the online portal via Direct Benefit Transfer system.
What essential certificates must my Khadi institution possess to be eligible for participation in this market development assistance program?
Your institution must hold a valid Khadi/Polyvastra Certificate and a valid Khadi Mark Certificate to be eligible for Modified Market Development Assistance.
Within what timeframe must institutions submit their quarterly claims to avoid forfeiture of their assistance under this market development scheme?
Claims not submitted within 15 days of the quarter's completion will be forfeited and returned to the institutions, so timely submission is mandatory.
What type of bank account arrangement is mandatory for institutions receiving Modified Market Development Assistance funds under this program?
Institutions must maintain a separate bank account specifically for Modified Market Development Assistance funds, which will be subject to verification by Khadi and Village Industries Commission.
Who is responsible for processing and releasing the Modified Market Development Assistance funds after institutions submit their quarterly claims?
Directorate of Khadi scrutinizes claims and recommends them to Directorate of Accounts within 7 working days, which processes and releases funds within 5 working days.
What specific workers and staff members are classified as Karyakartas eligible for incentive payments under this market development assistance scheme?
Karyakartas include salesmen, saleswomen, cashiers, accountants, marketing executives, helpers, tailoring staff, store-keepers, godown-keepers, and artisans engaged in pre-processing and processing activities like dyeing.
Can institutions producing Khadi for Government Rate Contract supplies receive the full Modified Market Development Assistance under this scheme?
No, Government Rate Contract production is not eligible for full Modified Market Development Assistance, but artisans and Karyakartas receive a specific incentive at 17.15% on prime cost.
What annual documentation must institutions provide to maintain their eligibility and ensure proper utilization of the assistance funds received?
Institutions must furnish annual utilization certificates rendered by registered Chartered Accountants and quarterly utilization certificates to demonstrate proper fund utilization to Khadi and Village Industries Commission.
How long can institutions utilize their Modified Market Development Assistance funds for specific purposes like modernization and technology upgradation projects?
Utilization for modernization, renovation, and research and development may be allowed up to two years from actual receipt date with specific sanction from Khadi and Village Industries Commission.
What percentage of financial assistance is available for Silk Khadi products and how does this differ from other Khadi product categories?
Silk Khadi receives Modified Market Development Assistance calculated at 20% on Prime Cost, which is lower than the 35% rate for Cotton, Muslin, Wool Khadi and Polyvastra products.
Ready to apply?
Visit the official government portal to apply for this scheme.
Apply on myScheme.gov.inDocuments Required
- > **At Application Stage**
- Detailed Claims as per the Prescribed Format (The MMDA guidelines specifically reference Annexure-III and Annexure-IV for utilization statements, which are part of the claim submission).
- Quarterly Claims of Modified Market Development Assistance on Prime Cost for the Production Achieved during the Preceding Quarter.
- > **At Benefit Disbursal / Post-Disbursal / Monitoring Stage**
- Quarterly Utilization Statement of Modified Market Development Assistance Grant (in Annexure-III format).
- Annual Utilization Certificate rendered by a Registered Chartered Accountant (CA), clearly indicating registration number and address of the CA (in Annexure-IV format).
- Receipt of Remittance of Fund to the State Level Artisans Welfare Fund (This was required under previous MDA guidelines to ensure artisan welfare measures).
- Certificate from the Producing Institution confirming release of the Modified Market Development Assistance portion to spinners, weavers, and selling institutions for the previous quarter.
- Records for Verification of Payments Made to Each Artisan, preferably through bank or post office account (for KVIC verification).
- Annual Stock Taking Statement (center-wise) duly signed by authorized stock-taking persons and authorized office bearers of the institution (to be furnished immediately after completion of the financial year).
- Audited Balance Sheet duly certified by the Chartered Accountant (for authentication of closing stock position).