The Khadi and Village Industries Commission Act, 1956

Summary of the Khadi and Village Industries Commission Act, 1956

Key Provisions:
1. Establishment of Khadi and Village Industries Commission (KVIC)
o The Act provides for the establishment of the Khadi and Village Industries Commission as a statutory body.
o KVIC functions under the administrative control of the Central Government.
2. Composition of the Commission
o The Commission consists of a Chairman and other members appointed by the Central Government.
3. Functions of KVIC
The Commission is responsible for:
o Planning, promoting, organising, and assisting the development of khadi and village industries.
o Providing financial and technical assistance to institutions and individuals engaged in these industries.
o Improving production methods and quality of products.
o Promoting marketing and sale of khadi and village industry products.
o Encouraging research and training activities.

4. Financial Provisions
o The Central Government provides grants, loans, and other financial assistance fund KVIC for performance of its functions.
o The Commission maintains accounts and prepares annual reports regarding its activities.

Legislative History: The Khadi and Village Industries Commission Act, 1956

Source: Official Record of Parliament, India Code, and Ministry of Micro, Small and Medium Enterprises

Key Legislative Metadata

Legislative Stage /Attribute Official Details

Act Title The Khadi and Village Industries Commission Act, 1956

Act Number Act No. 61 of 1956

Act ID (India Code) 195661

Presidential Assent date September 25, 1956

Enforcement Date September 25, 1956

Nodal Ministry Ministry of Micro, Small and Medium Enterprises

Precedent & Historical Rationale

1. Institutionalization of Rural Cottage Industries: Prior to this Act, the promotion of Khadi and rural crafts was managed by an advisory board—the All-India Khadi and Village Industries Board—set up in 1953, which lacked statutory executive authority and independent funding mechanisms.

2. Establishment of Statutory KVIC: Enacted to create a statutory apex body—the Khadi and Village Industries Commission (KVIC)—tasked with planning, organizing, promoting, and implementing developmental programs for Khadi and village industries in rural areas. It provided a dedicated statutory fund, raw material supply chain, research capacity, and marketing infrastructure for self-reliance in non-farm rural employment.

Parliamentary Trajectory & Enactment

● Formulation: Introduced by the Ministry of Production to give institutional weight to Gandhian economic principles within the Second Five-Year Plan.

● Parliamentary passage: Debated and passed by both Houses of Parliament (First Lok Sabha and Rajya Sabha) in September 1956.

● Presidential Assent: Received Presidential Assent on September 25, 1956.

● Enforcement: Enforced on September 25, 1956.