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MISSION Harit KHADI

A rural job and wealth creation initiative byShri Giriraj Singh

Mos-MSME Govt. of India

A Khadi revamp Proposal

At a Glance

❖ Solar charkha and loom as an alternative

❖ Generating employment opportunities

❖ Regaining Khadi’s lost glory in textile sector

❖ Creation of Wealth

❖ Impacts

PM address of Solar Charkha in “Mann ki Baat”

Vision● To generate employment for 5 crores

women/men in rural India

● Empowerment and Engaging women/men meaningfully in their premises and thereby generating wealth

Solar Enabled Charkha as an Alternative

“A scientific study of the spinning-wheel will lead on to Sociology. The spinning-wheel will not become a power for the liberation of India in our hands unless we have made a deep study of the various sciences related to it. It will then not only make India free, but point the way to the whole world”.-Mahatma Gandhi

● Objective is, technology should not replace humans

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Objective

● To create 1 lac rural jobs in each parliamentary constituency (by 2016-2022)

● To cover artisans under various Government run social security schemes like Atal Pension Yojna,PM Suraksha Bima Yojna and PM Jivan Jyoti Beema Yojna

● To increase substantially the share of Khadi (presently 1.5%) in Indian Textile industry

Place of Khadi in Cotton textile Sector

Power Loom 61.90%

Handloom 11%

Hosiery 21%

Mill 3.80%

Khadi 1.5%

KVIC And KVIC Institutions

● KVIC was established under KVIC act 1956

● There are 2397 registered Khadi Institutions

● More than 7000 outlets

● Sales more than Rs.26000 Cr

● Various schemes like PMEGP, SFURTI, ISEC run by KVIC.

Historical Trends in Production of Khadi

  

Year 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

Production (Rs in

crores)461.54 468.30 491.52 543.39 585.25 628.98 673.01 716.98 761.93 811.08

Cumulative Employment Generated

(in lakh persons)

8.64 8.68 8.84 9.16 9.50 9.81 10.15 10.45 10.71 10.98

Trend Analysis

● In real sense, production is gradually declining

● There is no substantial increase in number of people associated with its production

The main reasons are as follows:

● Less wages (esp. as compared to MGNREGA)

● Exodus of artisans

● No profit motive of Charkha Sangh, hence Khadi can not be the platform for employment

● Khadi being in the negative list of PMEGP till recently

Note-Recently, Khadi has been removed from the negative list of PMEGP Scheme by the new Government

Khadi as a Change Agent● A step towards Zero effect and Zero defect

● Nearly Zero Carbon Foot Print

● Minimum Water consumption (For 1 meter Khadi fabric, 3 liter water is required and for 1 liter Mill fabric 55 liter water is required)

● Khadi production strengthens the local level economy

● Sustainable mode of employment generation

● Reduces gender economic inequality, as majority of artisans would be women

● Reduces the Drudgery

● Improves the quality of Yarn/Fabric

● Decentralization of Textile production

● Employment generation throughout India

The Textile Market Structure

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Textile & Apparel Market

Fabric and Yarn Market

Textile(29%)Apparel (71%)(RTW/RTS)

Home Textile (7%)

Technical Textile (22%)

Menswear (31%)

Women's wear (27%)

Kids Wear (13%)

In the past…..

● The technology was experimented at Eight different locations, but could not be scaled up

● IMG meeting, involving Secretary MNRE decided in Favor of introducing 2 lacs Charkha every year with 30-50% margin money

● The Hon’ble Minister has taken up the project on Pilot basis at Khanwa, Nawada, Bihar under the Aadarsh Gram Yojna

Positioning of Green Khadi

Khadi Vastra

Cotton Khadi Wool Khadi(J&K,HP,NE)

Silk Khadi(NE,WB,Bihar,UP)

Khadi Poly Khadi

Green Khadi/Lok Vastra

Why Khadi production needs to be scaled up

1) From Customer’s perspective

There is a latent demand for Khadi due to its inherent quality of being environment friendly

2) From population growth perspective

10 year population growth at 18%, i.e 1.8% pa

2 cr people added to population every year

Assuming demand of 26 mtr per person as per textile census, there is an ever increasing demand for 52 cr mtr, which can be tapped by Khadi.

Additionally Yarn produced from solar charkha can be supplied to handloom sector (which has 11% share in total textile production).

On 3rd Oct 2014, PM Modi in his program “Mann Ki Baat” made an appeal to the nation to adopt Khadi which resulted in Increase in sales of Khadi between 60% To 125%

Cont…3) From employment perspective

A mill with 25000 spindle capacity, (with approx. Rs.100 cr investment) employs 150-200 people, hence input cost per capita employment is Rs.66 lacs.

On other side it requires Rs. 1lac to employ One person by the means of Solar Charkha

4) Increase in production

Increasing demand of eco friendly clothes at national and international level, as it emits zero carbon

Demand for organic and environmentally friendly products goes up as evident in organic sector.

This increase in demand should be catered by taking the First movers advantage

Comparison of Spinning Mill and Solar Charkha

Sl. No. Spinning Mill Solar Charkha

1. 25000 Spindles - 1 in no.Capacity

782 Solar Charkha in no.Assuming 32 spindles/Charkha

2. Manpower - 150requirement (1 shift)

782 women (i.e. 5 times)

3. Power Consumption/day - 50-70 thousand units KWH/day

All Solar renewable energy, No Carbon footprint.

4. Project Cost APPROX 100 crores

7 to 8 cr (Without PMEGP Margin Money)

5. Centralized production & fixed variety of Yarns production.

Decentralized productions & multiple varieties of Yarns can be produced.

Comparison of Artisans’ Income and Cost Benefit

Existing – NMC Model(8 Spindles)

Solar Chrkha Model

(2*16=32 Spindles)

Remarks

Daily Production (40 Count) 15 Hank(400 gms)

240 Hank(6 Kgs.)

• Production up by more than 20 times.

• Least Drudgery involved • Wage component down

by 80%• More than Four times

Income appreciation to Artisans.

• With drastic reduction in wages cost. Yarn cost is quite competitive.

Daily Wages,per hank, Rate (Rs.)

Rs. 5/- Rs. 1.50/-

Daily Wages Gross Rs. 75/- Rs. 360/-

Monthly Income (25 Working days)

Rs. 1825/- Rs. 9000/-

Financial Model

Solar Charkha Unit Cost

2 Solar Charkha of 16 Spindle Or1 Solar Charkha of 32 Spindle along with the working capital

Rs. 1,00,000

● 1) PMEGP- 25% To 35% margin money

● 2) MNRE Subsidy

● 3) Bank Loan

Sl. No.

  Daily Monthly(assuming 25 working

days)1 Wages income @ 1.5/- per Hank(240*1.5)

(Assuming 240 Hank /6Kg production) Rs.

360.00Rs. 9000.00

2 EMI (for 5 years)   (-) Rs. 600.00

3 Atal Pension Yojana (5000/- pension)(21 years of artisan)

  (-) Rs. 271.00

4 PM Suraksha Bima Yojana(Rs 12/annum)

  (-) Rs. 1.00

5 PM Jiwan Bima Yojana(Rs 330/annum)

  (-) Rs. 28.00

  Net Income   Rs. 8100.00

Solar Charkha

Sl. No.

  Daily Monthly(assuming 25 working

days)1 Wages income @ 10/- per meter

Assuming 32 metre weaving per dayRs.

320.00Rs. 8000.00

2 EMI (for 5 years)   (-) Rs. 900.00

3 Atal Pension Yojana (5000/- pension)(21 years of artisan)

  (-) Rs. 271.00

4 PM Suraksha Bima Yojana(Rs 12/annum)

  (-) Rs. 1.00

5 PM Jiwan Bima Yojana(Rs 330/annum)

  (-) Rs. 28.00

  Net Income   Rs. 6800.00

Solar enabled loom

Financial Model cont….● In this financial model, there would be Tri partite agreement among

artisans, Khadi institutions and the bank. Artisans would be linked up with Bank through his/her Jan Dhan account to facilitate all credit/ debit with regard to loan, social security schemes, wages and enterprise related activities.

● KVIC will provide the linkage to provide the raw material i.e. roving cotton and arrange for the buyback of the yarn produced or weaved cloth.

*Note: Assuming 1000 households in a village and the Mission Khadi reaches to 90% of the household. Out of which 400 are spinners and 500 are weavers.

No. of weavers/ spinners

Monthly Income (Rs)

Income per annum (Rs)

Total Income (Rs)

400 Spinners* 8100 97,200 3,88,80,000

500 Weavers* 6800 81,600 4,08,00,000

At Village Level 7,96,80,000

Wealth creation at village • Cost of 1Kg of roving cotton = Rs. 150

• 1Kg of roving cotton can produce 1 Kg of yarn which can further produce approx. 8 mtrs of cloth

• Sale Price of 8 mtrs of grey cloth = Rs. 400

• Creation of value by going up the Khadi value chain (400-150) = Rs. 250

• Creation of wealth (400*5*300*250) = Rs 15,00,00,000 (15 Cr)

• This wealth creation can be further enhanced by going higher up in the Khadi value chain like producing white cotton, dyeing and apparel making.

Marketing

● Search for new market as per the count of the yarn

● Target Big Institutions-Railways, Army, Police, Hospitals, Schools, private apparel manufacturers etc

● Revamping of 7000 KVIC retail stores

● Bringing designer inputs catering to the latest fashion trends and targeting youth by products like “Denim”

● Tie ups with readymade manufacturers and encourage them to display Khadi made products

● Building on International demand and target 2.5Crore NRI’s across the world.

The Way Forward

● Establishment of Green Khadi Cluster

● Under the cluster model ginning, roving, spinning, weaving, herbal dyeing (vegetable colors), finishing, stitching and apparel making will take place in surrounding villages

● Promotion of Ancillary industry

● Promotion of Khadi designing and branding

● Further R&D for improving the Solar Charkha and Solar power loom models

Impact

• Spur in the demand of cotton – can revive cotton agriculture by supporting higher MSP

• Strengthening local level economy

• Decentralization of production.

• Strengthening women’s standing & voice in family and society

• Increased income in the hands of the women will promote sanitation & education ( especially girl child education )

• Favorable effect on industrial production due to increased demand of Solar Charkha and solar loom

• Promotion of renewable energy i.e. solar energy and

• Reduces rural distress

Present schemes in Khadi

1) Revamped SFURTI-Initiated in Oct,2005

2) PMEGP

3) ISEC Yojana

4) MDA Policy

5) Support in Production enhancement, design and packaging

6) Work shed Yojana for Khadi artisans

7) Janshree Bima Yojana for Khadi artisans

The Khanwan Experiment

● Sansad Adarsh Gram Khanwan has been chosen for the pilot run of Solar Charkha model. A training cum production centre is being established

● 208 Solar Charkha (8 and 10 spindle) has been provided with the help of KVIC, PMEGP

● To promote spinning among women they are currently being provided with an inflated wage rate of Rs 200/kg

● The wage will be gradually reduced to Rs 60/Kg once the women are completely trained and start handling 24 and 32 spindle charkhas and thus spinning 5 Kgs of yarn per day (8 hours).

The Denim Production: We are Competent

Pilot Stage Commercial stageCost of Roving cotton 1kg 150 150Cost of spinning 200 60Processing cum Weaving (4 mtr Denim) 240 240Overheads 100 100Cost of Denim 690 550Cost of Denim/metre 172.5 137.5Prevalent Market Price 230 230Margin 57.5 92.5

Note: 1 Kg of 33 count yarn produces 4 meters of denim.Overheads include administrative cost, rent, repair & maintenance, depreciation among others.A part of margin can be utilised for effective, branding and marketing.

Khanwan Model-Scaling up

1) In next phase, 800 solar charkha with 24 and 32 spindle will be introduced for scaling up the production.

2) A trainer’s training academy will be established to produce master trainers (spinners and weavers).

3) This model should be further replicated to all 790 Sansad Adarsh Gram in the first phase of rolling out.

4) A rural cotton textile hub should be promoted by keeping the Adarsh Gram in centre.

5) In the entire Khadi Value chain one Charkha provides 10 employment (From Ginning to selling of finished product).

6) An inter-ministerial committee of MSME, Textile and MNRE should be formed for close coordination.

Govt. outlay on promoting this employment scheme

1) A) 1st Phase: 793 Sansad Adarsh Gram will require a margin money of 2,775 Cr. (79300000* .35)

B) A+ Khadi institutions would be covered under Solar Charkha/loom mission.

2) This subsidy can be offset by the excise, sales tax and VAT. This will amount to approximately 2000 Cr

3) Further every single full time self employment will reduce the outlay on MNREGA

4) MP can support in establishment of training cum production center using his MPLAD funds in his Sansad Aadersh Gram.

Total Outlay

Cost of Charkha (32 spindle) 1.00 Lakh 7930 Cr (793*100000)

Margin Money @ 35% under PMEGP 0.35 2775 Cr

Suggestions

● Government can continue with giving policy support to existing mills, but further no schemes should be made to encourage new spinning mills.

● An appeal made by the PM increased the Khadi sales by many fold and also motivated many people to get actively involved in the Khadi revamp process. Taking this initiative forward Hon PM should organize a meeting with the leading fashion designers, Weavers, Khadi entrepreneurs to take this revolution to next level.

● Tie ups with leading textile and apparel manufacturers like Arvind Mills, Levis, etc for denim sale.

Policy support from Ministry of Textiles

1) Pilot Scheme of Institutional up gradation of Power looms

2) Hire-Purchase scheme for Power loom sector Technological Up gradation fund scheme i.e. TUFS

3) CFC

4) Corpus for yarn bank

5) Scheme for incubation in Apparel Manufacturing (SIAM)

6) Scheme for Integrated Textile Parks (SITP)

7) Comprehensive Handloom Development Scheme (CHDS)

Thank you