No plan to close khadi units — Raje

To preserve the spirit of swadeshi and the model of self-reliant growth of the KVI sector, the Government was providing huge subsidies and grants, she said. During 1998-99 and 1999-2000, a sum of Rs 149.09 crore and Rs 140.69 crore respectively had been paid as khadi rebate, "which was an all-time record". During the current financial year, Rs 129 crore have been provided for payment of khadi rebate claims, she said.

The Government would come out with a five-year action plan to revitalise the industry after submission of the report, which would provide the road map to make khadi a major export-oriented industry, she said.

She also assured members that the action plan would incorporate the recommendations of the high-power committee headed by former Prime Minister P V Narasimha Rao.

Admitting that there was an unsold inventory of Rs 700 worth of khadi goods, the Minister said the Government was taking steps to clear the stocks and urged State Governments to announce additional rebate for the purpose.

She blamed poor quality and absence of marketing for the low offtake and the action plan would seek to address these issues. She also tried to dispel misconception about withdrawal of rebates and quoted statistics to show the quantum of rebates released to various states.

The Minister made it clear that the Government had no intention to close down any khadi unit. Referring to the allegations of corruption raised by some members during discussion, she said the government was aware of the problem.

Raids were conducted to detect malpractices in claims of khadi rebates and make distinction between genuine and bogus khadi and village institutions, Raje said, noting that in many cases the institutions were found to be non-existent or bogus.

Earlier, initiating the discussion, Manmohan Singh voiced concern over growing unrest in the khadi industry and demanded an action-oriented policy to revitalise it, which alone could tackle the problem of rural unemployment.

Singh regretted that no effective steps were taken to promote khadi and said statistics showed that there was a perceptible decline in employment as well as production in the industry.

Singh said the Narasimha Rao Committee had recommended a Rs 5,700 crore five-year plan to revitalise the Khadi and Village Industries in 1995 and wanted to know what action government had taken on this.

Asserting that the KVI must co-exist with modern industry, Singh said the committee had said the industry had the potential to create two million jobs annually and it is in this context that it needs to be promoted.