<p>With the Khadi and Village Industries Commission (KVIC) withdrawing the 20 per cent rebate last year, many khadi co-operative societies founded and run by freedom fighters are now on the verge of closure.<br /><br />Most of the societies would not be able to sell khadi this season, which starts either on August 2 or 10 and runs for 30 days to mark the Independence Day. <br /><br />The societies register their highest sales during the three discount seasons — 18 days for Independency Day, 30 days for Gandhi Jayanthi from October 2 and 30 days for Republic Day from January 10.<br /><br />The 56-year-old rebate system came to an end on April 1, 2010, with the introduction of the marketing development assistance (MDA) scheme by KVIC.<br /><br />Apart from KVIC’s rebate, the State government used to give an additional 15 per cent rebate through Karnataka Khadi and Village Industries Board (KVIB) to boost sales and popularise khadi products. Initially, the State government used to match the KVIC rebate of 20 per cent when it was introduced in 1984, but it was later reduced to 15 per cent by subsequent governments.<br /><br />End users are losers<br /><br />Under the MDA scheme, the subsidy goes directly to production units and they are supposed to share their profits with customers instead of the government doling out benefits to end users. <br /><br />So societies that only sell products do not get any subsidy to pass on to the customers. The societies are also facing a cash crunch due to pending dues from the KVIB, which runs into lakhs of rupees leaving the societies with no funds to purchase new stocks.<br /><br />According to the new rule of the KVIB, 15 per cent rebate would be provided only to products manufactured in Karnataka. However, it is available to products bought from other states in exchange to products produced in the State. Even here, only those societies with production units get the benefit. Even though the demand for khadi in the State is increasing, government’s curbs do not allow societies to do business. Production centres are only in Badavanalu and Tagaduru in Mysore; Holenarasipur, Uppina Bettageri, Hubli, Gadag and Bangalore. <br /><br />Little variety<br /><br />However, there is little variety. If we are allowed to buy from Kerala and Tamil Nadu, we would have a wide range of choice, said manager of a society, who wanted to remain anonymous.<br /><br />He said the societies could survive only if the rebate regime is resumed. KVIB should clear dues to societies and encourage inter-state business, he added.</p>
<p>With the Khadi and Village Industries Commission (KVIC) withdrawing the 20 per cent rebate last year, many khadi co-operative societies founded and run by freedom fighters are now on the verge of closure.<br /><br />Most of the societies would not be able to sell khadi this season, which starts either on August 2 or 10 and runs for 30 days to mark the Independence Day. <br /><br />The societies register their highest sales during the three discount seasons — 18 days for Independency Day, 30 days for Gandhi Jayanthi from October 2 and 30 days for Republic Day from January 10.<br /><br />The 56-year-old rebate system came to an end on April 1, 2010, with the introduction of the marketing development assistance (MDA) scheme by KVIC.<br /><br />Apart from KVIC’s rebate, the State government used to give an additional 15 per cent rebate through Karnataka Khadi and Village Industries Board (KVIB) to boost sales and popularise khadi products. Initially, the State government used to match the KVIC rebate of 20 per cent when it was introduced in 1984, but it was later reduced to 15 per cent by subsequent governments.<br /><br />End users are losers<br /><br />Under the MDA scheme, the subsidy goes directly to production units and they are supposed to share their profits with customers instead of the government doling out benefits to end users. <br /><br />So societies that only sell products do not get any subsidy to pass on to the customers. The societies are also facing a cash crunch due to pending dues from the KVIB, which runs into lakhs of rupees leaving the societies with no funds to purchase new stocks.<br /><br />According to the new rule of the KVIB, 15 per cent rebate would be provided only to products manufactured in Karnataka. However, it is available to products bought from other states in exchange to products produced in the State. Even here, only those societies with production units get the benefit. Even though the demand for khadi in the State is increasing, government’s curbs do not allow societies to do business. Production centres are only in Badavanalu and Tagaduru in Mysore; Holenarasipur, Uppina Bettageri, Hubli, Gadag and Bangalore. <br /><br />Little variety<br /><br />However, there is little variety. If we are allowed to buy from Kerala and Tamil Nadu, we would have a wide range of choice, said manager of a society, who wanted to remain anonymous.<br /><br />He said the societies could survive only if the rebate regime is resumed. KVIB should clear dues to societies and encourage inter-state business, he added.</p>
