ADB grants USD 150 million aid to khadi industry

NEW DELHI: The Asian Development Bank has sanctioned a grant of USD 150 million to finance reforms in the khadi industry.

"The Grant will revolutionise the khadi sector and generate lots of employment opportunities, improve productivity and provide higher wages to artisans," Minister of Micro, Small and Medium Enterprises Mahabir Prasad said in a statement here.

The grant would benefit 300 institutions in the first phase. The ADB would provide the assistance over a period of three years from 2008-09, it said.

The reform programme is aimed at introduction of modern management practices and strengthening of human resources, growth in the non-farm rural sector and resurgence of traditional village industries, he said.

The programme seeks to increase the involvement of private entrepreneurs by phasing out subsidies, professionalism in design and marketing, and enabling the use of "khadi mark".

The reform of khadi institutions would enhance quality, design, and artisan welfare. Nearly three-fourth of programme resources are directed to supporting khadi institutions, he added.

Institutional reforms at Khadi and Village Industries Commission (KVIC) will strengthen its development role and minimise its direct production and marketing activities, he said.