A recent article in The Economic Times asks: “What’s the deal with khadi? 7 lakh jobs lost in quick time, but production up by 32%”.  The story cites 2015-16 and 2016-17 data to say that the number of people employed in the khadi sector fell from 11.6 lakh to 4.6 lakh between 2015-16 and 2016-17.
Now, the report does say: “A closer look suggests that at least some of this may be just records getting cleaned up. But how much is due to this factor and how many jobs have been lost to modernisation is not clear.”
Well, that clarity might have been arrived at if the reporter had bothered to clarify the matter properly with the Khadi and Village Industries Commission (KVIC), which does not seem to have been the case, a KVIC statement said.


In fact, this is where the story is.
Therefore, what is actually “records getting cleaned up” needs elaboration.
Khadi Employment Facts: The Ghosts Are Gone, it added.
Earlier, the Marketing Development Assistance (MDA) or subsidy was given to the Khadi institutions on their production of Khadi by the KVIC. For example, if Rs 100 is paid as MDA to Khadi institutions by the KVIC, it was distributed in the following manner:
Rs 40 to Khadi institution, Rs 40 to Khadi artisans and the remaining 20% for sales discount on their products by the institutions. The entire payment was being given by the KVIC to the Khadi institutions.
However, the KVIC received serious complaints that the subsidy was not reaching the artisans. The KVIC also received complaints that the Khadi institutions were claiming the MDA on inflated numbers of artisans. It was also noticed that they used to claim subsidy even for those artisans who had left the sector in the last 20 years due to old age, death, sickness, marriage, migration etc.
When this picture emerged, the KVIC began to clean up the data and remove the numbers of those artisans who had exited and were no longer associated with the Khadi institutions due to the reasons explained above.
The KVIC decided to pay the MDA directly to the artisans and introduced online Direct Benefit Transfer (DBT) system through Aadhaar-seeded bank accounts. This happened in January 2016 and it resulted in the flushing out of the ghost artisans – numbers which were used to swallow up the subsidy in their name.
The above exercise established verified genuine data of artisans; an exercise not attempted earlier and also did away with unverified numbers. Because of this clean-up operation, the imaginary numbers of artisans have been brought down to what the real numbers are. Thus, this did not result in any job loss in the Khadi sector unlike what is claimed in the Economic Times article.
Now, the report casts doubt on the Prime Minister’s Employment Generation Programme (PMEGP) as well. This also needs a fact-check and further deliberation.
Performance of PMEGP
Under PMEGP, it may be noted that theperformance in the PMEGP programmeis not declining but actually increasing.The report itself mentioned that during 2015-16, about 3.2 lakh people were given employment under the scheme which in 2016-17 rose to 4.10 lakh.However, the correct figure is 4.49 lakh.
During the current year 2017-18, the achievements against the number of persons to be employed stands at 64% till January 2018 and within the remaining two months, the achievement is expected to be more than 100%.
In fact, the KVIC’s record under PMEGP always seemed to be bright in recent years. Some of the findings of an independent evaluation study of the KVIC in 2016-17 states that there is a surge in employment generation under the PMEGP as far as Khadi and village industries are concerned.
Since the KVIC achieved more than 100% target of subsidy allotted under the PMEGP, nearly 4 lakh new jobs were created, with an estimated project cost of Rs 4,800 crore, marking a huge growth of approximately 24% with respect to the financial year 2015-16.
Even the KVIC Annual Report 2016-17 had mentioned the outstanding performance of the PMEGP in terms of projects involved, allocation and employment creation. It stated in particular that after the programme started in 2008-09, this was the best-ever performance.
Khadi’s Transformation
Apart from the employment figure, a sea change in the quality of employment in this field cannot be missed either.
The traditional one-spindle charkha, which has low productivity, is being gradually replaced by the New Model 8 and 10 spindle Charkhas (NMC) that have increased the production and helped the artisans to better earnings. The production capacity of single-spindle charkhas was just 4 to 5 hanks per day, which has gone up to 20 to 25 hanks per day on NMC charkhas.
Earlier, the Khadi institutions had work of only 2-3 hours as the demand was meagre for them. Today, with better and more aggressive marketing as well as support from the Centre, orders are coming in from all sectors. As such, Khadi institutions have work of more than 8 hours a day for artisans.
It is perhaps also pertinent to note that during the last 2 years, 18,728 NMC charkhas and 3,582 modern looms were distributed to artisans. This too helped increase production and sales. Furthermore, during the last 2 years, 326 new Khadi institutions have been added, which again has increased the production.
In conclusion, it can be said that the story is not really about the declining number of jobs but the enriching of the life of artisans by ensuring that the money meant for them goes to them without any leakage.