MSME Ministry Seeks Rs 6,000 Crore To Extend Khadi Gramodyog Scheme Till 2031

New Delhi, Oct 30 (KNN) The Ministry of Micro, Small and Medium Enterprises (MSME) has sought an allocation of Rs 6,000 crore to continue its flagship Khadi Gramodyog Vikas Yojana for five years through March 2031, as the government considers further support for a sector that sustains millions of rural livelihoods.

The proposed funding is intended to support artisans, predominantly women, unemployed rural youth, self-help groups and village industries, according to three people aware of the development. 

They said adequate funding would also help preserve khadi's legacy as a symbol of India's freedom struggle, reported The Mint.

Around 20.4 million people were engaged in khadi and village industries in FY26, according to the Khadi and Village Industries Commission (KVIC), highlighting the sector's contribution to rural employment and income generation.

The government spent Rs 2,374 crore under the scheme in the three years through FY26. 

It comprises two components: Khadi Vikas Yojana, which promotes and develops the khadi sector, and Gramodyog Vikas Yojana, which supports village industries through common facilities, technological modernisation, training and other assistance.

“Discussions are ongoing for the Khadi Gramodyog Vikas Yojana, there are plans to continue the targeted support for that ecosystem,” a government official said.

The MSME Ministry supports khadi manufacturing and village industries through the KVIC, a statutory body established under an Act of Parliament in 1956.

Queries emailed to the MSME and Finance ministries and the KVIC on October 28 remained unanswered.

Sales growth and modernisation

Sales of khadi and village industry products reached Rs 1.87 trillion in FY26, registering a 20 per cent increase from Rs 1.55 trillion in the previous financial year, according to provisional KVIC data released in May.

Khadi sales alone rose 10 per cent to Rs 7,869 crore in FY26, compared with Rs 7,145 crore a year earlier.

(KNN Bureau)