Khadi Gramodyog Vikas Yojana: Khadi Vikas Yojana
Khadi Vikas Yojana (KVY) is a sub-scheme of Khadi Gramodyog Vikas Yojana implemented by KVIC to promote Khadi production, strengthen Khadi institutions and support artisans. Key assistance includes 35% MMDA for Cotton/Muslin, Wool and Polyvastra, 20% for Silk Khadi, concessional 4% interest under ISEC, and work-shed assistance up to ₹1.20 lakh for an individual work-shed.
1. Scheme Objectives & Overview
Key assistance available under the verified scheme framework includes:
• Modified Market Development Assistance (MMDA): Assistance is calculated at 35% of Prime Cost for Cotton/Muslin, Wool and Polyvastra and 20% of Prime Cost for Silk Khadi. The Prime Cost includes raw material cost, conversion charges up to grey cloth and processing charges without margins.
• Interest Subsidy Eligibility Certificate (ISEC): Registered Khadi Institutions implementing Khadi and Polyvastra programmes can obtain credit for Capital Expenditure and Working Capital at a concessional 4% per annum rate. The difference between the bank's actual lending rate and 4% is borne by the Government through KVIC as interest subsidy.
• Work-shed Scheme for Khadi Artisans: Financial assistance is available up to ₹1,20,000 for an individual work-shed and up to ₹80,000 per artisan for a group work-shed. The scheme booklet specifies an individual work-shed area of 20 sq. metres and group work-shed provision of 10 sq. metres per artisan, with assistance generally linked to 75% of eligible work-shed cost, subject to the applicable ceiling; for NER locations the rate may be 90% where applicable.
• Strengthening Existing Weak Khadi Institutions: Assistance for revival of eligible weak/problematic Khadi Institutions is available with a ceiling of ₹15 lakh, covering capital expenditure and working fund.
• Marketing Infrastructure Assistance: Assistance can extend up to ₹25 lakh for eligible renovation and development of sales/marketing infrastructure, with the exact Government grant and institution contribution depending on the category of outlet. Official operational guidelines specify examples including 100% Government grant up to ₹25 lakh for KVIC departmental sales outlets, 85% up to ₹21.25 lakh for KVIB departmental outlets, and 75% of eligible cost for certain institutional outlets subject to prescribed ceilings.
• Other KVY components include Centre of Excellence for Khadi, Khadi Quality Assurance, Marketing/Exhibitions and Science & Technology interventions.
The latest Union Budget outcome document for 2026-27 continues Khadi Gramodyog Vikas Yojana with a financial outlay of ₹1,094.51 crore, including targets of 1,050 Khadi Institutions receiving MMDA and 1,50,000 artisans benefiting through MMDA.
Applicants should rely on the current KVIC/MSME guidelines and the official portal for the final eligibility, documentation and approval requirements because component-specific conditions can differ.
2. Eligibility Criteria & Beneficiary Qualifications
Applicant must be a Khadi artisan or registered Khadi Institution
Eligibility depends on the specific KVY component. ISEC is specifically applicable to registered Khadi Institutions implementing the Khadi and Polyvastra programme.
Institution registration
Apply through the applicable KVIC/KVIB process and follow current institutional registration requirements.
Khadi / Polyvastra programme
This rule is specifically relevant to ISEC assistance.
Individual artisan work-shed
Financial assistance is subject to the prescribed ceiling and eligible cost under the current work-shed guidelines.
Group work-shed
Group assistance is subject to the prescribed per-artisan ceiling and eligible cost.
Duplicate government assistance for same purpose
The provided reference material states this restriction; final determination should follow the applicable current KVIC guideline.
3. Mandatory Documents Required
Aadhaar Card / Government ID
Valid Aadhaar card or other government-issued identity proof as applicable.
Age Proof
Document supporting the applicant's age where required by the applicable component.
Khadi Artisan Card / KVIC-KVIB Registration Certificate
Proof of Khadi artisan status or registration of the Khadi Institution with KVIC/KVIB.
Bank Account Details
Bank account information required for financial assistance, subsidy or institutional transactions as applicable.
Caste Certificate
Valid caste certificate where the applicant claims a category-specific benefit or preference.
BPL Certificate
Valid BPL certificate where applicable.
Project Proposal / Work-shed Details
Project proposal, work-shed plan, cost details or other technical information where required for the selected component.
Institutional Registration Documents
Registration certificate, constitution/bylaws, artisan list and other institutional documents where applying as a Khadi Institution.
4. Standard Application & Approval Process
DPR Formulation & Supplier Quotations
Prepare a Detailed Project Report itemizing machinery costs, power load sanction, and working capital needs from GST-registered suppliers.
Online Portal Registration & Upload
Register on the designated official nodal portal (e.g. JanSamarth.in or KVIC online) with Aadhaar, PAN, Udyam, and select your preferred bank branch.
DTFC Review & Bank Credit Appraisal
District Task Force Committee (DTFC) verifies eligibility and forwards the proposal to the bank branch for credit assessment and sanction letter issuance.
Disbursement & 3-Year TDR Subsidy Lock-In
Upon borrower margin deposit (5% - 15%), the bank disburses credit. The subsidy is parked in an interest-free 3-year TDR and credited against principal upon audit.
Eligible Business Blueprints for Khadi Gramodyog Vikas Yojana: Khadi Vikas Yojana
Verified enterprise blueprints and project models eligible for capital subsidies and credit support under this scheme.
Ice Cream and Dairy Products Manufacturing Business
Build a dairy processing business around ice cream, frozen dairy desserts and selected dairy products, starting with a small controlled production setup and scaling into a commercial cold-chain operation.
Poultry Farming Business
Start a poultry farm at the scale that matches your land and capital, from a small broiler unit using an existing shed to a commercial broiler or layer farm with dedicated housing, equipment, biosecurity and working capital.
Mini Rice Mill Business
Start a mini rice mill for custom paddy milling or build a small commercial rice-processing operation with hulling, polishing, grading and packing as production volume grows.
Frequently Asked Questions
Everything you need to know about eligibility, subsidy disbursement, and application timelines for Khadi Gramodyog Vikas Yojana: Khadi Vikas Yojana.
Khadi Vikas Yojana (KVY) is a sub-scheme under Khadi Gramodyog Vikas Yojana and is implemented by KVIC under the Ministry of MSME. It supports Khadi artisans and Khadi Institutions through MMDA, ISEC interest subsidy, work-sheds, infrastructure and marketing assistance.
There is no single flat subsidy amount for the entire KVY. Under MMDA, assistance is 35% of Prime Cost for Cotton/Muslin, Wool and Polyvastra and 20% for Silk Khadi. Separate components provide work-shed, institutional revival and marketing infrastructure assistance with their own ceilings.
Eligible registered Khadi Institutions implementing the Khadi and Polyvastra programme can access credit for Capital Expenditure and Working Capital at a concessional 4% per annum rate under ISEC. The difference between the bank's actual lending rate and 4% is borne by the Government through KVIC as interest subsidy.
Under the work-shed component, assistance is available up to ₹1,20,000 for an individual work-shed and up to ₹80,000 per artisan for a group work-shed, subject to the applicable cost and area conditions.
Yes. The scheme provides assistance for strengthening eligible weak/problematic Khadi Institutions, with a ceiling of ₹15 lakh covering capital expenditure and working fund, subject to the applicable approval conditions.
Yes. Marketing Infrastructure Assistance can provide support up to ₹25 lakh, but the actual Government grant depends on the type of outlet and the prescribed funding pattern. For example, the official operational guidelines provide up to ₹25 lakh Government grant for KVIC departmental sales outlets and lower grant ceilings for certain KVIB and institutional outlets.
The provided reference text mentions an 18 to 55 years age condition, but the latest official scheme material reviewed for this seed does not clearly establish this as a universal condition for every KVY component. Therefore, the applicable KVIC/KVIB component guideline should be checked before treating the age band as mandatory.
Ready to Apply for Khadi Gramodyog Vikas Yojana: Khadi Vikas Yojana?
Get official eligibility guidelines, mandatory document checklists, and direct online nodal portal application access — 100% free.