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Non-payment of arrears weighs khadi sector down

Special Correspondent

JAIPUR: The khadi units are under severe financial stress across the country following the delay in payment of a huge sum of money by the Centre in lieu of the rebates they had provided to the consumers in the past three years. Repeated appeals to the Khadi Commission and a memorandum to the Prime Minister in April have not made the authorities to act on the SOS from these organizations once envisaged by Mahatma Gandhi as the instruments for building up “Gram swaraj”.

The Union Government owes a whopping Rs. 495 crores to 2,000-odd khadi organizations in the country. They together employ around 20 lakh artisans, weavers and other skilled and semi-skilled workers in 30,000 villages. The amount is the accumulation of reimbursements the Centre had committed for allowing a 20 per cent rebate in khadi products for over three months every year starting from October 2, the Gandhi Jayanti Day.

Apart from the pending funds, a recent decision by the Union Ministry of Micro, Small and Medium Enterprises to discontinue with the rebate has added to the crisis. Most of the sales take place in the khadi outlets during the rebate period. “Almost 75 per cent of our sales are during the 108 days when the rebate is given. The decision to do away with it was unilateral on the part of the Government,” Laxmichand Bhandari, veteran Sarvodaya leader and State convener of the newly formed Khadi Mission, said.

The khadi sector now proposes a one-day shut down of its units across the country on August 16. “The khadi sector is facing neglect. Many decisions taken by the Khadi and Village Industries Commission (KVIC) as well as the Ministry concerned had been against the long term interest of the khadi movement. The khadi organizations will soon find it difficult to survive,” noted Mr. Bhandari.

“In the absence of rebate only the urban outlets register any sale. Normally the customers, especially those in the rural areas, wait for the rebate to start,” Banwari Lal Gaur, president of Bharatiya Adimjati Sevak Sangh, pointed out. Citing the example of Rajasthan -- which is a strong khadi State -- he said that of the average annual sale worth Rs.40 crore in the State, the normal eight months accounted only for Rs.8 crore sales.

The rebate scheme has been replaced by MDA (Marketing Development Assistance) by the Union Ministry which practically allows only a meagre rebate of Rs. 5 to the consumers. “Of the 20 per cent now provided by the Centre Rs.5 goes to the weaver as bonus and Rs.6 towards improving the organizational infrastructure while another Rs.9 is meant for buying furniture. What then remains is Rs.5. In our view the authorities should leave the matter of utilization of the 20 per cent to us,” Mr. Bhandari argued.

The khadi organizations are seeking a new deal for them from the Government. Their demands include waiver of old loans going back to 20-40 years as most of them have paid back the original amounts as interest.

“There should be an amendment in the existing guidelines to help the khadi sector to come out of the crisis. Apart from the ideology part of it, no other industry can provide this many jobs with this kind of meagre investment,” Sarvodaya leader Sawai Singh pointed out.

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