KVIC Act amendments approved to modernise khadi and village industries governance in India

The Centre has cleared a proposal to revise the Khadi and Village Industries Commission KVIC Act, 1956. The MSME Ministry said on Tuesday the move targets a newer legal base for the khadi and village industries KVI sector. The plan focuses on governance, inclusion, and stronger rural enterprises. It also aims to improve how village industries compete in India and abroad.

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The ministry said the draft changes seek to match current economic and rural development needs. The proposal also aims to sync the law with existing policy frameworks. It is linked to the Government’s goal of inclusive and sustainable rural economic development. The ministry added that the amendments would also help formalise rural enterprises under clearer rules.

KVIC Act amendments and rural area definition

A key change updates the meaning of rural area in the KVIC law. The definition is set to match the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission Gramin: VB-G Ram G Act, 2025. An official statement said this would widen scope for convergence with national rural programmes. The ministry said the shift is meant to ensure greater inclusivity.

The proposal also raises the fixed capital investment limit per artisan or worker. It is being aligned with investment thresholds for micro enterprises under the Micro, Small and Medium Enterprises Development MSMED Act. The ministry said this reflects current scale needs in village industries. It would also help eligible units access benefits available to the MSME sector.

KVIC Act amendments to boost competitiveness and market reach

To improve KVI competitiveness, the amendments add focus on several areas. These include branding, exports, innovation, standardization, digitalization, and protection of Geographical Indications GIs. The MSME Ministry said these steps may improve market presence for khadi and village industries. The intent covers both domestic markets and international demand.

The draft also allows the Central Government to notify new village industries. The ministry said this enabling provision would keep the sector open to new opportunities. It is also meant to account for technological changes. The proposal links this flexibility with changing economic needs in rural areas.

KVIC Act amendments and governance reforms

The proposal includes changes in how the Commission is represented and run. It seeks broader representation of women, Scheduled Castes, Scheduled Tribes, the Central Government, and the Mahatma Gandhi Institute for Rural Industrialisation MGIRI. The ministry said these reforms would support more inclusive governance. The goal is to improve how decisions reflect varied stakeholders.

The Ministry of Micro, Small and Medium Enterprises said it would use existing systems to apply the changes. Implementation would run through KVIC field offices and State Khadi and Village Industries Boards KVIBs. It would also involve Khadi Institutions, Village Industries Institutions, and entrepreneurs. The ministry said the same network would help execution across regions.

After the Amendment Act is enacted, the ministry said it would notify the revised provisions. It also plans nationwide dissemination and awareness programmes. The ministry listed workshops, seminars, and outreach campaigns for grassroots implementation. These steps are intended to help local institutions understand and apply the new rules.

The statement said the amendments are expected to strengthen the khadi and village industries ecosystem. It linked the impact to better access to finance, technology, and markets. The ministry also cited innovation, value addition, rural entrepreneurship, and sustainable jobs. It said benefits would cover all states and Union Territories through existing agencies.

With inputs from PTI