Khadi units’ sales soar 14% to Rs 37,935 crore

NEW DELHI: India Inc may be complaining of weak rural sales due to poor rains for two years in a row, but khadi and village industries , which manufactures products ranging from honey to soaps and food to handicrafts, are cloaking a double-digit growth.

Data available with TOI shows sales of khadi and village industries shot up by over 14% to Rs 37,935 crore during 2015-16, while India’s top FMCG players reported a much lower sales growth. The only exception perhaps is Ramdev’s Patanjali Ayurved, which claimed to have grown faster by more than doubling its turnover to Rs 5,000 crore last year.

Unlike FMCG firms that rely on their own plants for production, khadi and village industries products are manufactured by 7 lakh privately-owned household units.

These units are funded through schemes such as PM’s Employment Generation Programme

A small part of the produce is sold through Khadi Boards and outlets owned by Khadi and Village Industries Commission (KVIC). The majority of products, which could be henna, papad or agarbattis, is directly sold through private shops.

 Unlike Patanjali, which has launched a high-decibel campaign, village industry sales have been driven by an aggressive distribution push, including to institutional buyers such as Air India and Indian Railways, said KVIC chairman VK Saxena. Air India for instance has placed a Rs 8 crore order to source khadi products for kits given to first and business class travellers.

Khadi fabric and garments sales witnessed a 29% growth and crossed Rs 1,500 crore mark for the first time. While the government is pushing khadi, there is also a change in the sales mix with readymade garments now accounting for around 45% compared to nearly 30% two years ago.

 KVIC is now tying up with Paytm to offer “high-end products” online. It has also entered into arrangements with companies such as Raymond and Fabindia. Sources said that KVIC will for the first time also enter into franchise agreements for around 20 new stores in Kolkata and Mumbai, with Delhi expected to join later.

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