Punjab to shut down KVIB; industry says it’s a setback for small scale units

Chandigarh, May 22 (KNN) In a huge setback to thousands of MSME units in Punjab that have been set up by the subsidies provided by the Khadi and Village Industry Board (KVIB), the state government has decided to shut down the board.

Under KVIB Punjab Government had facilitated setting up over 50,000 production units in the state over the last several decades.

The staffs employed with the board across 22 districts will be shifted to the state industries department.

Around 80 posts in the board had been lying vacant. Punjab is the first state to shut down khadi board constituted under the Parliament Act 1955.

The state used to receive a grant of Rs 10-12 crore every year from the Union government to provide 25% subsidy on loans to set up small scale units in rural areas. The maximum limit of subsidy was Rs 25 lakh under this scheme.

According to a media report, the Punjab State Service Federation is fearing that the move would discourage new small scale units in Punjab.

The decision to shut down the board could also cut down state revenues as Punjab might lose additional taxes generated by the small industrial units, said the federation.