National Geoscience Awards 2026

This scheme boosts Khadi and Polyvastra product production and sales by supporting technology, market promotion, and giving Read More... direct incentives to artisans and Karyakartas. Read less

Details

The Indian government, through the Ministry of Micro, Small & Medium Enterprises (MSME), has introduced the Modified Market Development Assistance (MMDA) Scheme. Launched on April 1, 2010, this initiative is designed to significantly improve the Khadi sector.

What Is This Scheme?

The MMDA Scheme aims to streamline financial aid and encourage better marketing practices for Khadi and Polyvastra products. It focuses on upgrading technology, strengthening sales networks, and providing crucial incentives to the artisans and workers who are the backbone of Khadi production.

Who Can Benefit From This Scheme?

This scheme directly supports Khadi Institutions, including those involved in production, sales, or both. It also extends benefits to artisans (spinners, weavers, reelers, etc.) and Karyakartas (workers involved in sales, pre-processing, post-production, and processing activities).

Why This Scheme Is Important

By providing financial assistance tied to the 'Prime Cost' of products, the scheme helps institutions invest in better equipment, design innovation, and sales infrastructure. The direct incentives ensure that artisans and workers are rewarded for their efforts, leading to improved quality and increased production, ultimately boosting the overall Khadi industry.

Objective

This scheme boosts Khadi and Polyvastra product production and sales by supporting technology, market promotion, and giving direct incentives to artisans and Karyakartas.

Benefits

The awardees are presented with certificate and a plaque.

Sources and references

Guidelines

Eligibility Criteria

The applicant must be a registered Khadi Institution.
The institution must be affiliated with the Khadi and Village Industries Commission (KVIC), State/Union Territory Khadi and Village Industries Boards (KVIBs), or their units.
A valid Khadi/Polyvastra Certificate is mandatory.
A valid Khadi Mark Certificate is required.
The institution's annual budget must be approved by KVIC.
To be a 'Producing Institution', the applicant must be involved in Khadi production.
To be a 'Selling Institution', the applicant must be involved in selling Khadi purchased from producing institutions.
To be a 'Composite Institution', the applicant must be engaged in both Khadi production and selling.

How To Apply

Applications for the Modified Market Development Assistance Scheme are accepted online. Institutions need to submit detailed claims as per the prescribed format, including quarterly claims for the production achieved in the preceding quarter. For specific details and the application portal, refer to the official guidelines and KVIC website.

Documents Required

At Application Stage:

Detailed Claims as per the Prescribed Format (Annexure-III and Annexure-IV for utilization statements).
Quarterly Claims of Modified Market Development Assistance on Prime Cost for the Production Achieved during the Preceding Quarter.

At Benefit Disbursal / Post-Disbursal / Monitoring Stage:

Quarterly Utilization Statement of Modified Market Development Assistance Grant (Annexure-III format).
Annual Utilization Certificate from a Registered Chartered Accountant (CA) with registration number and address (Annexure-IV format).
Certificate from the Producing Institution confirming the release of MMDA portion to spinners, weavers, and selling institutions for the previous quarter.
Records for Verification of Payments Made to Each Artisan (through bank or post office account).
Annual Stock Taking Statement (center-wise), signed by authorized persons.
Audited Balance Sheet certified by the Chartered Accountant.

Official Sources

For detailed guidelines and claim formats, please refer to the official Khadi and Village Industries Commission (KVIC) website.

FAQ’s

What are the eligibility criteria for Khadi institutions to apply for this market development assistance?

To be eligible, your institution must be registered and affiliated with KVIC or State/UT KVIBs, hold valid Khadi/Polyvastra and Khadi Mark Certificates, and have an annual budget approved by KVIC. You must also be actively involved in production, selling, or both.

What percentage of financial assistance is provided for Silk Khadi under the MMDA scheme?

For Silk Khadi, the Modified Market Development Assistance is calculated at 20% on Prime Cost. This is different from the 35% rate applicable to Cotton, Muslin, Wool Khadi and Polyvastra products.

How is the Prime Cost calculated for the purpose of this scheme?

Prime Cost includes the cost of raw materials, conversion charges up to grey cloth, and processing charges. It specifically excludes establishment margin, trade margin, insurance, and bank interest.

Who is considered a Karyakarta for receiving incentives under this scheme?

Karyakartas include a wide range of workers such as salesmen, saleswomen, cashiers, accountants, marketing executives, helpers, tailoring staff, store-keepers, godown-keepers, and artisans involved in pre-processing (like dyeing) and post-production activities.

How often are the MMDA funds disbursed to institutions and beneficiaries?

The Modified Market Development Assistance funds are released on a quarterly basis. This is done through the online portal via Direct Benefit Transfer, based on the claims settled in the previous quarter.

What is the timeframe for submitting quarterly claims to avoid them being rejected?

It's crucial to submit your quarterly claims within 15 days of the quarter's completion. Claims submitted after this period will be forfeited and returned.

Do artisans producing Khadi for government supplies also receive assistance?

While production for Government Rate Contract (RC) isn't eligible for the full MMDA, artisans and Karyakartas involved in such production can receive an MMDA incentive calculated at 17.15% on prime cost.

What are the reporting requirements for institutions after receiving MMDA funds?

Institutions must submit quarterly utilization statements and an annual utilization certificate from a Registered Chartered Accountant. They also need to provide records of payments made to artisans.

What percentage of the MMDA is allocated to artisans like spinners and weavers for Cotton, Wool, and Polyvastra Khadi?

For Cotton, Woolen, and Polyvastra Khadi, 35% of the total MMDA amount is passed on directly to artisans (spinners & weavers) as an incentive or bonus through their Aadhaar-seeded bank or post office accounts.

Can funds for modernization or technology upgrades be used over a longer period?

Yes, the utilization of MMDA funds for specific purposes like modernization, renovation, and research and development may be permitted for up to two years from the date of receipt, provided there is specific sanction from KVIC.

What documents are required when applying for the Modified Market Development Assistance?

At the application stage, you'll need to submit detailed claims as per the prescribed format and quarterly claims for the production achieved in the previous quarter.

How are the MMDA funds disbursed to the beneficiaries?

MMDA is disbursed through an online portal via Direct Benefit Transfer (DBT). KVIC ensures the amount for artisans and Karyakartas is transferred directly to their Aadhaar-linked bank or post office accounts.

What is the financial assistance rate for Cotton, Muslin, and Wool Khadi?

The Modified Market Development Assistance is calculated at 35% on the Prime Cost for Khadi products made from Cotton, Muslin, and Wool, as well as for Polyvastra.

Are there any specific conditions for institutions that are involved in both production and selling?

Yes, Composite Institutions involved in both production and selling of Cotton, Woolen, and Polyvastra Khadi receive 51% of the MMDA amount to be utilized for both product development and market development.

What is the maximum quarterly bonus an individual Karyakarta can receive under the Silk Khadi category?

Under the Silk Khadi category, Karyakartas receive 10% of the total MMDA amount as an incentive or bonus, with a maximum ceiling of ₹10,000/- per quarter per Karyakarta, whichever is less.