The Government has approved a proposal to amend the Khadi and Village Industries Commission (KVIC) Act, 1956 with the objective of modernizing the legal framework governing the Khadi and Village Industries (KVI) sector. The amendments aim to align the Act with contemporary economic and rural development priorities, strengthen institutional governance, promote inclusivity, formalize rural enterprises, and enhance the competitiveness of village industries in domestic and global markets.
Among the key changes is the alignment of the definition of "rural area" with the provisions of the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin): VB-G Ram G Act, 2025, thereby broadening the scope for convergence with national rural development programmes. The proposal also enhances the limit of fixed capital investment per artisan or worker in accordance with the investment thresholds applicable to micro enterprises under the Micro, Small and Medium Enterprises Development (MSMED) Act, enabling eligible enterprises to access MSME sector benefits.
The amendments place greater emphasis on branding, exports, innovation, standardization, digitalization, and the protection of Geographical Indications (GIs) to strengthen the market presence of khadi and village industries. Institutional reforms ensure more inclusive governance through enhanced representation of women, Scheduled Castes, Scheduled Tribes, the Central Government, and the Mahatma Gandhi Institute for Rural Industrialization (MGIRI). An enabling provision empowers the Central Government to notify new village industries to keep the sector responsive to emerging economic opportunities.
The Ministry of Micro, Small and Medium Enterprises will implement the amended provisions through KVIC field offices, State Khadi and Village Industries Boards (KVIBs), Khadi Institutions, Village Industries Institutions, and entrepreneurs. Following enactment, the Ministry will notify amended provisions and undertake nationwide dissemination through workshops, seminars, and outreach campaigns. The amendments are expected to strengthen the khadi and village industries ecosystem by improving access to finance, technology, and markets; promoting innovation; encouraging rural entrepreneurship; and generating sustainable employment opportunities.
The implementation will be undertaken within the approved budgetary allocations of the Ministry of MSME with no additional financial implications. The benefits will extend across all States and Union Territories through the existing institutional framework of the Ministry of MSME, State Governments, and implementing agencies.