For Prelims: Khadi and Village Industries Commission (KVIC), Interest Subvention, Market Development Assistance (MDA), Lok Sabha Rule 377
For Mains: Financial inclusion for artisans; DBT for transparency; Wage security in the informal sector; Revitalizing traditional industries
Source:
Hindustan
5 facts for one-day exams
SSC, railway, police and teaching exams ask direct questions like these.
- Spinning wages doubled from ₹7.50 to ₹15 per lacchi.
- Loans at 4% annual interest under ISEC scheme.
- Minister Jitan Ram Manjhi replied in Lok Sabha on 27 Oct 2026.
- Question raised by SP MP Ramashankar Rajbhar under Rule 377.
- Khadi and village industries fall under the Khadi and Village Industries Commission (KVIC) which is under the Ministry of Micro, Small and Medium Enterprises (MSME).
Why in the news?
The government has announced key reforms for the Khadi and Village Industries sector, including a doubling of wages for spinners and concessional bank loans at 4% interest. These measures aim to address issues of delayed payments, raw material shortages, and low wages raised by MPs in Parliament.
Summary
- Spinning wages in the Khadi sector have been doubled from ₹7.50 to ₹15 per 'lacchi' over the past three years.
Background
The Khadi and Village Industries sector, a symbol of India's self-reliance movement, has long faced structural challenges including delayed payments from implementing agencies (like KVIC), raw material scarcity, high working capital costs, and inadequate wages for spinners and weavers. These issues were formally raised in the Lok Sabha under Rule 377, which allows for short-duration discussions on matters of public importance.
Key Analysis and Impact
The government's response outlines a multi-pronged intervention. Doubling spinning wages directly addresses income inadequacy, a critical social justice issue. The 4% interest subvention under ISEC significantly reduces the cost of credit for Khadi institutions, improving their financial viability. Mandating 49% of MDA incentives via DBT ensures transparency and timely support to the actual artisans, reducing leakages. These measures collectively aim to revitalize the sector by making it more remunerative for workers and financially sustainable for institutions.
Way Forward
The success of these measures hinges on effective implementation and monitoring. Future steps may include expanding raw material supply chains, enhancing marketing and branding of Khadi products globally under initiatives like 'One District One Product', and integrating Khadi with the PM Vishwakarma scheme for further skill and credit support. Sustained policy focus is needed to transform Khadi from a symbolic to a commercially vibrant and equitable sector.
Background GK
Textbook concepts you need to understand this news
- Khadi and Village Industries Commission (KVIC)
- A statutory body established by an Act of Parliament in 1956, under the Ministry of MSME. It is tasked with planning, promoting, organizing, and implementing programs for the development of Khadi and other village industries.
- Interest Subvention
- A subsidy on interest provided by the government to specific sectors (like agriculture, MSMEs) to make loans cheaper for borrowers. The government reimburses the lending bank for the difference between the market interest rate and the concessional rate offered.
- Market Development Assistance (MDA)
- A financial incentive scheme, typically for exporters or specific domestic sectors like Khadi, to help them develop markets, participate in fairs, and promote their products, thereby enhancing competitiveness.
- Lok Sabha Rule 377
- A rule in the Rules of Procedure and Conduct of Business in Lok Sabha that allows a member to raise a matter of public importance for a short duration without a formal question, followed by a reply from the concerned minister.
Facts to remember
Tap a card to see the answer. Try to recall it first.
How exams will ask this
- Data: Spinning wage increased from ₹7.50 to ₹15 per lacchi.
- Nodal Body: Ministry of Micro, Small and Medium Enterprises (MSME).
- Scheme: Interest Subvention Eligibility Certificate (ISEC) scheme offering 4% interest loans.
Common mistake:
Examiners may ask about the percentage of MDA transferred via DBT (49%) and swap it with a close distractor like 51% or 40%. They may also confuse the nodal ministry with the Ministry of Textiles or Rural Development.
Write these in mains answers
- Financial inclusion for artisans
- DBT for transparency
- Wage security in the informal sector
- Revitalizing traditional industries
Stuck? Get it in one tap
The government reports that spinning wages were increased from ₹7.50 to ₹15 per lacchi and that eligible institutions are being offered bank loans at 4% annual interest under the ISEC scheme to assist artisans. A 'lacchi' is a unit of spun yarn.
- Economy: Government Schemes and Initiatives
- Governance: Parliament and Parliamentary Procedures
Related concepts: Khadi and Village Industries Commission (KVIC), Interest Subvention, Market Development Assistance (MDA), Lok Sabha Rule 377
Practice questions
Pick an answer, then read the explanation.
- Q1Easy
Which ministry is responsible for the Khadi and Village Industries sector and provided the reply in Parliament?
Explanation: The reply was sent by the Union Minister for Micro, Small and Medium Enterprises, Jitan Ram Manjhi. The Khadi and Village Industries Commission (KVIC) functions under the administrative control of the Ministry of MSME.
- Q2Hard
Consider the following statements regarding the recent measures for the Khadi sector:
- 1.Spinning wages have been increased from ₹10 to ₹20 per lacchi over the past three years.
- 2.Under the ISEC scheme, eligible institutions can avail bank loans at an interest rate of 4% per annum.
- 3.49% of the Market Development Assistance (MDA) incentive is given directly to artisans through Direct Benefit Transfer.
Which of the statements given above is/are correct?
Explanation: Statement 1 is incorrect: wages were increased from ₹7.50 to ₹15, not from ₹10 to ₹20. Statement 2 is correct. Statement 3 is also correct as mentioned. Hence, option C is correct.
- Q3Medium
According to the government's reply in Lok Sabha, what is the current wage rate for spinning per 'lacchi' in the Khadi sector?
Explanation: Over the past three years, spinning wages have been increased from ₹7.50 to ₹15 per lacchi. Therefore, the current rate is ₹15.
- Q4Medium
What is a primary objective of providing bank loans at 4% interest under the ISEC scheme to Khadi institutions?
Explanation: The issue of 'interest burden on working capital' was raised by the MP. The provision of loans at 4% directly addresses this by reducing the cost of credit, thereby easing the financial pressure on Khadi institutions and improving their operational viability.
Frequently asked questions
1. Who is the Minister of Micro, Small and Medium Enterprises?
Jitan Ram Manjhi is the Minister of Micro, Small and Medium Enterprises.
2. How much have spinning wages been increased to per lacchi?
Spinning wages have been doubled from ₹7.50 to ₹15 per lacchi over the past three years.
3. What is the interest rate on loans under the ISEC scheme?
Eligible institutions receive bank loans at 4% annual interest under the ISEC scheme.
4. When did Minister Jitan Ram Manjhi reply in Lok Sabha about the Khadi sector reforms?
Minister Jitan Ram Manjhi replied in Lok Sabha on 27 October 2026 to a question raised under Rule 377 on 29 July 2026.
All sources
- Original31 October 2026 · Read story
