The Khadi and Village Industries Commission (KVIC) faces a significant challenge as only 18 out of its 92 departmental trading units remain operational, according to a report by the Comptroller and Auditor General of India (CAG). This revelation has emerged amid the Indian government’s efforts to promote Khadi products and encourage the adoption of ‘Vocal for Local’, ‘Khadi for Nation’, and ‘Khadi for Fashion’ concepts.
The functional trading units include the Central Sliver Plants and Khadi Gramodyog Bhavans, which serve as sales outlets for Khadi products. However, the CAG report, based on data until March 31, 2021, highlighted that a substantial 74 trading units were defunct. The CAG conducted a compliance audit of the 18 operational units and their supply chain management spanning from 2017-18 to 2020-21. Additionally, the audit delved into a general examination of 25 non-operational units to determine the reasons and impact of their closure.
The audit findings revealed that the initiatives to maintain and enhance the trading units’ functionality faced multiple challenges and implementation weaknesses. Despite less than 20% of the departmental trading units managing to sustain operations, the KVIC has not undertaken an analysis to identify the root causes of the units’ discontinuation. This oversight raises questions about the commission’s strategic approach to maintaining its trading infrastructure.
The report highlighted that the reasons behind the closure of 11 out of the 25 non-functional trading units were not available, while in the cases of three units, the provided reasons and justifications were deemed insufficient. The CAG noted that with more proactive efforts from KVIC, some of these closures could have been averted. Furthermore, it uncovered that two of the non-functional trading units were potentially losing out on revenue due to unauthorized sales of Khadi products by private parties, highlighting an opportunity for revenue generation that KVIC could have harnessed.
The current state of KVIC’s trading units underscores the need for a comprehensive assessment of the challenges faced and the corrective measures required. As the government continues to emphasize the importance of ‘Vocal for Local’ and the utilization of Khadi products, ensuring the operational efficiency of KVIC’s trading units becomes vital. This CAG report serves as a call for KVIC to introspect, identify the weaknesses, and take the necessary steps to enhance the performance and sustainability of its trading infrastructure.
