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Wom* Rrcaranq R ietg.r('t x ur&silrerr@*irrcbr '* I$IADI AND VI I,I,AGII INT,U STRI ES COM NIISSION A ag (ti }rt rFr 3ryrr d'Trdrq, *na' Q:tr6T{ w$r - slr{tra Ministry of N'licro, Small & Mediurn Enterprises, Govt. of India, TTITRSTqtET{r;TITfiFT om* rrcaranq r REFORM IMPLEM ENTATION DIVISION wci'uldm"3ffif{qmrr No. RID/KRDP/ 3'd Tranche ConditiorV2)lT-IBl Dated: 10.08.2017 To, Dy. Secretary, Govt. of India, Ministry of MSME, Udyog Bhavan, New Delhi -110 011 Sub: Compliance of 3'd Tranche revised restructured conditions under KRDP fulfilling Re-categorizatton of Khadi Institutions -reg. Ref: ADB 18 re-structured conditions for KRDP-KVIC. Sir, Kindly refer the revised 3'd Tranche restructured conditions under KRDP to be compiled as per the time line of ADB. In this connection, it is to inform that as per the time line of ADB, one of the conditions that "KVIC shall have re-categorized the remaining Khadi institutions using the modified norms" the said tranche condition is completed and the relevant report on re-categorization of Khadi institutions on revised framework and analysis is enclosed herewith for ready reference. It is therefore, requested to kindly forward the said documents to ADB for further needful action. This is issued with the approval of Competent Authority. Yours faithfully, Encl: As above. Dy. Chief Executive,ffi Officer (RID) Copy to:- l. The JS, MSME, New Delhi. 2. The Senior Project Officer (Urban) ADB, New Delhi. 3. Shri Vivek Mathur, Section Officer, MSME, New Delhi. rJri-6q, 3 {ai *"s, ffi qr# (qrft'rT), ria't-+ooose Gramodaya, 3, Irla Road. Vile Parle (W), Mumbai-4000S6 T e l: 022 -267 1 4320 I 22 I 25. Te tef ax : A22-267 1 1 5g?, Email: [email protected] Website: www.kvic org rn {srfr 3ik qnftry}er s{I.qtrr ,Ar KHADI AND VILLAGE INDUSTRIES COMMISSION qi:x trg qd'rramr s-*rr dqmq, nrrir s{qirt Ministry of Micro, Small & Medium Enterprises, Govt. of lndia, 6riffil EFrqt-c.I{fi lil,Irrr WHimar{-a{trdr1atil WE REFORM IMPLEMENTATION DIVISION No.RIDA(RDP/ 3'd Tranche 12017 - 181 Date: 04.A9.2417 The Under Seeretary Govt"of India Ministry of MSMtr Udyog Bhavan, New Delhi-l100 11 Sub: Compiiance of 3'd Tranche revised restructured conditions under KRDP fulfilling re-categorisation of Khadi institutions -reg. Ref: Ministry letter No.4/6612016 - KVI - I dated: 21.08.2017 . Sir May kindly refer the your letter under reference cited above regarding furnishing the clarifications on compliance of 3'd Tranche revised restructured conditions under KRDP fulfilling re-categorisation of Khadi institutions. In this connection, it is to inform that the following clarifications are furnished for ready reference:- 1. The re-categorisation of balance of 2I9 KIs is concerned that they are currently defunct, i.e., these are not undertaking production or sales activities. Hence, re-categorisation has been undertaken only for 2011 ( 400 KIs in 1't Tranche & 1611 KIs in 3'd Tranche) out of 2230 KIs 2. Regarding 19th indicator in re-categorization is that related to implementation of Khadi Mark. In this connection it is to inform that the data considered for re-categorization were taken for the year 20ll-12 md 2012-13 only. Hence, 19th indicator could not be taken into consideration as Khadi Mark was implemented from 2013 onwards. production & ' 3. The formula adopted for re-categorization for KIs both for Sales (Marketing) i.e. scale for measuring performance indicators. Hence, it has not been mentioned separately. 4.Re-categorizationofKlsisanintegralandon-goingprocessofKVICforAfter or it, through- automated system. monitoring the perfor**,* is the list of re-categorized KIs completing the proces* oir"-rutegorization, attached *itn tft" rePort' 5.ThefinaloutcomeisthedetailedtistofKlswiththechangesincategories, rePort' which was Provided in the Therevisedreportbyincorporating-aboveclarificationsisonceagurt onward transmission to ADB forwarded herewith for Itistherefore,Ministrymaykindlyconsidertheaboveclarificationsrestructured t" f"; qf 3iT itu"the revised and forward the report +?l ";r"pli*:J Khadi instituti ons' iinup fulfi llin g ;;;;* gori s ati on of c ondition, orro ", E-rtal.. 0s a,bo(e' nySir"ctor I/C ( of Division, Kvr Desk. Ministrv ll*.0 Mathur, section officer, ARr- :TJ - for information' MSME, Udyog gh;;u", New Delhi IiTg'400056 *rt*, t rdr dg, Ei* c'rd (c?tfur)' Parle-(W)' Mumbai-400056 Gramodaya, 3, lrla Road, Vile 1 5e3 i-t: oirioil 432at z2tzl,relefax 022-2671 www'kvic'org'in fmait: riOgxvic.gov.in Website: Revised Khadi Reform and Development Programme Report on Re-categorization of Khadi Institutions Revised Framework and Analysis August 2017 Re-categorization of Khadi Institutions (% KIs) 485 482 421 336 300 280 255 66 53 0 A+ A B C D 2004 2017 Table of Contents Table of Contents 1. Background ............................................................................................................................................... 2 1.2. Genesis of Categorization Process ............................................................................................. 2 2. Modified Framework for Re-categorization ...................................................................................... 6 2.1. Modified framework ......................................................................................................................... 6 2.2. Process of assessment of KIs for re-categorization............................................................... 9 3. Key Findings of Re-categorization .................................................................................................... 10 3.1. Change in categorization ............................................................................................................. 10 3.2. Indicator-wise performance of KIs ............................................................................................ 11 4. Way forward ............................................................................................................................................ 16 Annexure I: Categorization system of KVIC in 2004 ..................................................................... 17 1 Proposed Framework 1. Background Khadi is handcrafted textile of India. It was livery of freedom in independent India, now a livery of economic freedom in India for the rural artisans. Khadi is the pride of India and it has the distinction of being the only cloth to be used in the Indian National Flag. Khadi sector is characterized by decentralized production and selling by over 2230 NGOs here in after referred as Khadi Institutions (KIs) through their 7050 outlets spread across India. These KIs are the backbone of the sector and they provided employment to 11.07 lakh rural artisans in the country (KVIC Annual Report, 2015- 16). Khadi and Village Industry Commission (KVIC), a statutory body established in the year 1957 has been entrusted with the responsibility of planning, promotion, organization, implementation of programs and release of financial assistance for the development of the sector. KVIC extends benefits of certain central government schemes to the KIs based on their physical and financial performance. For this purpose, KVIC introduced a system of categorizing KIs based on their performance in the year 2000. The system has undergone several modifications since then. Under the Khadi Reform and Development Programme (KRDP) initiated in 2010 by Ministry of Micro Small and Medium Enterprises (MoMSME) with the support of Asian Development Bank (ADB), re-categorisation of KIs has been proposed as an important activity. The selection of KIs for extending assistance under Direct Reform Assistance (DRA) component of the programme is also linked to the re-categorisation process. This is because one of the key criteria for selection of KIs under DRA is its performance as rated under categorization system. In this context, the genesis of the categorization process since 2000 was studied in detail by the consultants. Thereafter, a modified framework has been proposed considering the objectives of re-categorization and factors such as the availability of data, existing monitoring mechanisms which could be possibly used for assessing KIs, reforms to be introduced in the KVI sector through KRDP and feasibility of periodic assessment. The findings of the background study conducted and modified framework for re-categorization are presented in this report. 1.2. Genesis of Categorization Process The current structure of categorization at KVIC has evolved in discrete steps over a period of 15 years. The chronological genesis is depicted in the diagram given below. Figure 1: Genesis of System for Categorisation of KIs Performance-based Credit rating Modified framework categorisation attempted for Khadi for re-categorisation introduced sector proposed Upto 2000 2001 2004 2013 2014 2016 Categorisation based on Separate parameters defined Framework for re- turnover for KIs engaged in production categorisation proposed & sales and KIs engaged only under KRDP in sales Abeyance on categorisation 1.2.1. Categorization of KIs in 2000 The categorization upto the year 2000 was primarily based on turnover. The main purpose was to enable KVIC to release financial assistance as per requirement of the KIs. 2 Proposed Framework Category Turnover Finance Large 1 Cr or more 25 % KVIC, 75% Bank Medium 25 lakh to 1 Cr 75% KVIC, 25% Bank Small Upto 25 lakh 100% KVIC Categorization of KIs upto 2000 The field officers from respective State offices conducted an annual visit to each KI and assessed it based
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