KVIC: Full Form, Functions, Schemes, and Loan Process for Rural Entrepreneurs

Established in 1957 under the Ministry of MSME, the Khadi and Village Industries Commission (KVIC) promotes rural entrepreneurship, safeguards traditional crafts, and encourages sustainable development. It provides financial support, skill training, and market opportunities for khadi and village-based industries. This article explores KVIC’s functions, organisational structure, and economic contributions, highlighting key initiatives such as PMEGP, Honey Mission, and SFURTI. It also offers practical insights into loan eligibility, application procedures, and interest rates—serving as a valuable resource for artisans, entrepreneurs, and stakeholders in rural development.

In summary

KVIC, or the Khadi and Village Industries Commission, supports traditional industries, rural entrepreneurship, and employment generation through government-backed schemes and financial assistance.

• Establishment: KVIC is a statutory body under the Ministry of MSME, established in 1957 to promote khadi and village industries.
• Key schemes: PMEGP supports employment generation, SFURTI strengthens traditional industries, and ISEC provides concessional funding at 4% p.a. for eligible khadi and Polyvastra manufacturers.
• PMEGP subsidy: Eligible applicants can receive subsidies of 15–25% under the general category and 25–35% under special categories, depending on location.
• Eligibility: KVIC-linked loan schemes may cover individuals aged 18 and above who meet the eighth-grade education requirement, as well as eligible SHGs, registered societies, and charitable trusts.
• Interest rates: Bank loan rates vary, while the ISEC scheme offers eligible beneficiaries a concessional rate of 4% p.a.

Beyond schemes supported by the khadi and village industries commission, eligible entrepreneurs can explore a Bajaj Finance Business Loan of up to Rs. 80 lakh to fund business operations and expansion.

KVIC — full form: Khadi and Village Industries Commission — is a statutory body under the Ministry of MSME, established in 1957 to promote khadi and village industries and support rural employment.

Which ministry oversees KVIC?

KVIC operates under the Ministry of Micro, Small and Medium Enterprises (MSME), Government of India. The ministry develops policies and programmes to support micro, small, and medium enterprises across India. KVIC has a distinct mandate within this framework, focusing specifically on promoting khadi and village industries, supporting artisans, and generating employment. Businesses seeking finance beyond scheme-specific assistance can also explore a Bajaj Finance Business Loan, subject to eligibility.

• Promotion of khadi:

The Khadi and Village Industries Commission (KVIC) is dedicated to revitalising khadi as a symbol of sustainability and eco-conscious living. Beyond being a fabric, khadi represents a lifestyle rooted in self-reliance and environmental responsibility—values that KVIC actively promotes through its various programs and initiatives.

• Development of village industries:

In addition to supporting khadi, KVIC fosters the growth of a wide range of village industries by offering khadi loans. These include agro-based, small-scale, and traditional craft sectors, which generate economic opportunities and improve livelihoods in rural communities across India.

• Employment generation:

KVIC plays a significant role in creating employment, particularly in rural and semi-urban areas, by promoting khadi and village industries. Through its support of traditional crafts and enterprises, the commission contributes to India’s socio-economic development and helps sustain jobs for artisans, weavers, and skilled workers.

• Preservation of traditional skills:

A core objective of KVIC is to protect and rejuvenate India’s rich heritage of traditional skills and craftsmanship. By making these practices economically viable, KVIC not only preserves cultural traditions but also enhances the income of local artisans and craftspeople.

• Market promotion:

To increase the market presence of khadi and village industry products, KVIC facilitates marketing support and builds strong market linkages both domestically and internationally. This helps rural entrepreneurs expand their reach, gain recognition, and access wider customer bases.

• Financial assistance:

KVIC provides financial aid to individuals, institutions, and organizations involved in Khadi and village industries. This support addresses funding challenges and fosters entrepreneurship, empowering rural communities to start and grow sustainable enterprises.

KVIC operates through 5 levels of organisational structure, from its board of directors down to district offices, to support the development of khadi and village industries across India.

• Agro-based and food processing: Processing of cereals, pulses, spices, edible oils (such as ghani oil), honey, pickles, jams, beverages, dairy products, and animal feed.
• Forest-based products: Handmade paper, bamboo and cane items, matches, katha, gums and resins, shellac, and agarbatti (incense sticks).
• Handmade paper and fibre products: Paper items such as bags, plates, and napkins, along with jute and other fibre-based products.
• Mineral-based products: Pottery, stone cutting and carving, chalk, lime products, and decorative stone items.
• Polymer and chemical-based products: Soaps, detergents, candles, mehndi, rubber goods, paints, and eco-friendly alternatives to plastic products.
• Rural engineering and biotechnology: Carpentry, blacksmith work, brass and copper utensils, and non-conventional energy applications.

• Textiles and services: Promotion of khadi (hand-spun and hand-woven fabric) and related textile activities, along with services such as handicraft marketing.

  
  

KVIC schemes and programs

KVIC has implemented various schemes and programs to achieve these objectives. Some notable ones include:

• Prime Minister's employment generation programme (PMEGP): This flagship program aims to generate employment opportunities by promoting micro-enterprises. It provides financial assistance for setting up new ventures and expanding existing ones.
• Honey Mission: Under this initiative, KVIC promotes bee keeping activities, creating avenues for honey production and related products. This not only boosts the income of bee keepers but also contributes to agricultural pollination. Businesses operating in multiple regions may find it helpful to refer to the GST state code for tax filing across state boundaries.
• SFURTI (scheme of fund for regeneration of traditional industries): SFURTI is designed to enhance the competitiveness of traditional industries and artisans. It focuses on cluster development to improve infrastructure, technology, and market access.
• Rebate on Interest for women entrepreneurs: KVIC provides a rebate on interest rates for women entrepreneurs engaged in khadi and village industries, encouraging their active participation in economic activities. To stay compliant, entrepreneurs can file their taxes through GST return systems, which ensures smooth operation of their enterprises.

KVIC provides a user-friendly digital platform for individuals and entrepreneurs to access information, schemes, and resources offered by the Khadi and Village Industries Commission (KVIC). Through KVIC online, applicants can explore KVIC loan programs, such as the Prime Minister's employment generation programme (PMEGP), facilitating convenient application processes and tracking. These loans allow aspiring entrepreneurs to establish or expand micro-enterprises, fostering employment and economic development. KVIC's online initiatives streamline access to financial assistance, promoting inclusivity and applying technology to support the growth of khadi and village industries across India.