ADB approves 150 mn loan to Khadi industry

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New Delhi, Oct 4: Finally a ray of hope for the Khadi industry to revive itself. The Asian Development Bank (ADB) is extending a loan of $150 million to India to help revive the Khadi, the widely-revered handspun and handwoven cloth, which has not developed to desired levels owing to poor production and marketing techniques.

According to an ADB statement, a $ 2-million grant will also be provided by the Japan Special Fund through the Manila-based multilateral institution to support the implementation and monitor the progress of the loan-funded reform package for the Khadi industry.

This loan could help the 73 pc rural poor through employment opportunities. The 11th Plan document has laid great stress on Khadi production, mainly owing to the huge employment prospects for women and minorities.

Mahatma Gandhi promoted the Khadi for generation of employment for rural people. But, Khadi has fallen behind the overall strong market demand enjoyed by the textile market. In contrast, the country"s overall textile sector has grown tremendously with the adoption of modern technology, branding, and strong marketing.

In fact, Khadi has been isolated from the evolving consumer taste due to ageing equipment, inconsistent product quality, lack of professional expertise and funding, and lack of unity and resolve within the industry to adjust to changing market trends. As a result, the product accounts for less than one per cent of the country"s textile market.

The production of Khadi being organised by non-government bodies while the State agency Khadi and Village Industries Commission (KVIC) provides policy, technical, and marketing support with financial subsidies from the Centre to promote the product. The loan, to be released in four tranches over a three-year period, is aimed at revitalising the Khadi industry by establishing a policy reform and implementation framework.

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