KVIC units defunct, reasons unknown

New Delhi The Comptroller & Auditor General (CAG) has found major flaws in the operations of the departmental trading units (DTUs) of the Khadi and Village Industries Commission (KVIC), including excessive collection of subsidies and defunct DTUs.

In spite of the fact that only less than 20 per cent of DTUs were able to continue operations, KVIC has not done any analysis to identify the reasons for the DTUs becoming defunct, a recent CAG report said. The reasons for closure were not available in 11 out of 25 DTUs.

In the case of three DTUs, the reasons and justifications of closure were not fully convincing and more efforts by KVIC could have prevented their closure. In case of another two DTUs, private parties were generating considerable revenue through unauthorized sales of khadi products, indicating scope for revenue generation through these DTUs, the CAG report said.

Though the deficiencies are being identified and corrective action initiated by KVIC, there was delay in disposal of assets, realization of dues, settlement of accounts, and re-deployment of staff of some of the defunct units.

“The Khadi Gramodyog Bhavans of KVIC were collecting excess share of production subsidy due (Modified Market Development Assistance) from the Khadi institutions whose products were being sold through them,” the report said.

Even though KVIC had developed the Khadi Institution Management Information System for the khadi sector, containing a module for uploading purchase/sales data of Khadi Gramodyog Bhavans, this data was not compiled into item-wise, supplier-wise information to obtain inputs on procurement plans and analyze market trends, the report said.

During the period between 2017-18 and 2020-21, KVIC attempted to implement a number of well-intentioned marketing initiatives such as e-commerce, market surveys, development of product catalogue and swatch book, hiring of marketing consultants, implementation of franchisee scheme and creation of Khadi Korners, construction of Khadi Plazas, and registration of Khadi Trademarks. These initiatives met with varying degrees of success, the report said. KVIC did not effectively utilize the information garnered by domestic and international market surveys for enhancing the domestic and export sales of khadi and village industry products.