Marketing Development Assistance (MDA)

5.1 Modified Marketing Development Assistance

Marketing Development Assistance (MDA) scheme was introduced by Khadi and Village Industries Commission in the year 2010-11 to encourage production and sale of Khadi.

The Marketing Development Assistance was revised as Modified Marketing Development Assistance (MMDA) from the year 2016-2017, and is calculated at 30 Percent of prime cost on Khadi production and is disbursed every quarter as follows:

Sl. No
1.	Incentive to Spinners/ Weavers	30%
2.	Incentive to Artisans	10%
3.	Production infrastructure and skill Development Training (for producing institutions)	20%
4.	Sales infrastructure including computerization (for producing institutions)	20%
5.	Market and sales promotion (for selling institutions)	20%

The Incentive of 30 Percent to the spinners and weavers and 10 Percent to the artisans enrolled in 66 Sarvodaya Sanghs and Tamilnadu Khadi and Village Industries Board are sent directly to the individual’s account through ECS by Khadi and Village Industries Commission every quarter. Disbursement details are uploaded in Khadi and Village Industries Commission’s website. Remaining 60 Percent (20 Percent each in Sl.No.3,4 & 5) is credited into the accounts of Sarvodaya Sanghs and Khadi and Village Industries Board by Khadi and Village Industries Commission for creating production infrastructure, Skill Development and development of marketing infrastructure facilities etc., by the Khadi and Village Industries Board as given below:-

Sl. No	Year	Amount received from KVIC ( Rs.in lakh)
1.	2023-24	33.43
2.	2024-25	22.53
3.	2025-26	63.38

Necessary guidelines are issued by Khadi and Village Industries Commission for implementing this scheme.
The Government of Tamilnadu also gives 20 Percent financial assistance on the production of Khadi as Marketing Development Assistance to all Sarvodaya Sanghs and Tamil Nadu Khadi and Village Industries Board. The State Government has raised the quantum of financial assistance to Sarvodaya Sanghs from Rs.15 Crore to 30 crore from the year 2017-18 and raised ceiling to Khadi Board from
Rs. 2 crore to Rs.4 crore from the year 2017-18.

5.2 Branding of Khadi Product

During the last year, the Government have sanctioned a sum of Rs.40.00 lakhs to do branding of Khadi and Village Industries products under Handloom Support programme to familiarize the Khadi products among the public.

5.3 Online Shopping

From the inception onwards, the Khadi and Village Industries Products being manufactured by the Board have been sold through our Khadi Krafts functioning across the State of Tamil Nadu.
With the advent of new technologies in the field of e-commerce as being adopted by Private players and also to manage inadequacy in staff strength, Tamilnadu Khadi and Village Industries Board have introduced On-line shopping for promoting the sale of “Khadi Kraft” products and Palm products in Tamilnadu. The official online website is www.tnkvib.org and www.tnkhadi.org.

5.4 Franchise - Opening of Khadi Kraft Franchise

1. Background

Khadi has a rich history and is a vital part of our ancient heritage. Khadi fabric continue to inspire across our nation and it has proven to be a culture itself and it is well known as Fabric of India. It is a symbol of Swadeshi spirit and played a vital role in the freedom struggle, based on the principles of Mahatma Gandhiji. Khadi has been providing livelihood to lakhs of rural artisans, most of them being women over many decades. The consumption of Khadi alone enables lakhs of poor people to earn an honest living, staying at home.
Main objectives of Khadi and Village Industries Board is to encourage, promote and assist Khadi and Village Industries in Rural areas with major focus on artisans and weaker sections to improve their livelihood and to give impetus to self reliance and strong rural economy.

2. Marketing

Khadi and Village Industries Board functions with the aim of generating sustainable employment opportunities to traditional artisans of non-farm sector in rural Tamilnadu and provides a way forward to a green economy. At present, in the Board 1116 spinners, 501 weavers and 920 artisans are engaging the Khadi and Village Industries production and sales activities.

3. Products

Khadi and village Industries Board have a wide assortment of products from apparel lifestyle accessories to cosmetic like body wash, hand wash, shampoo etc., under the below two umbrellas.

(a) Khadi products

hand – spun and hand woven fabric is manufactured in cotton and silk popularly termed as Khadi cotton and Khadi silk and it is well known among the common public of Tamilnadu for its fine texture, high quality and light weight and has its own brand recognition for its eco- friendly nature. We have a wide variety of apparels such as sarees, silk / cotton, Kurtas, shirts, bed spread, Towels, Mattresses, Pillows, Dhotis, Ladies stoles, Bed sheets, Kerchiefs etc.,

(b) Village Industries Products

Soaps

such as Kumari, New Kurinji Sandal, New Kurinji Neem, Mooliga, Sukandam Lavender, Poigai Red Sandal, Carbolic, Glycerine, Ultra Detergent Cake, Washing bar, Saral Shampoo, Ezhil Bodywash, Vaigai Handwash etc.,

Pooja Products

such as Agarbathi, Computer Sambrani, Cup Sambrani, Sandal Garland, Pooja Powder, Rose Water, Dasangam Powder etc.,

Other Village Industries Products

such as Candle, Chalk piece, Eucalyptus Oil, Black Phenyl, Sugapriya Pain Relief Oil etc.,

Leather Products

such as Shoes, Chappals, Belts, Conductor Bags and Rubberised Coir Beds etc.,

Wooden and Steel Furnitures, Honey, Handmade Paper etc

4. Who can apply for Franchise of Khadi Kraft

Any unit whether Proprietorship, Partnership Firm / Private Ltd., Company or Limited Company
Applicant should be financially sound
Applicant should have own / rented showroom having area minimum 300 sq.ft in prime location

5. Application Fee

Rs.10,000/- towards Application / Tender Fees (Rs.5,000/- fee + GST @ 18% on Rs.5,000/-) (Non refundable) should be submitted along with application form.

6. Mandatory terms and conditions

(a) Security deposit:-

The Franchisee shall furnish a interest free, refundable security deposit at the time of executing the agreement with the Franchisor, in the form of payment

The details of schedule of security deposit to be made with respect to the status of the area as follows:-

Sl. No
A.	Metropolitan cities	Rs.10.00 Lakhs
B.	Municipal Corporation	Rs.10.00 Lakhs
C.	Municipalities	Rs.9.00 Lakhs
D.	Town Panchayats	Rs.8.00 Lakhs
E.	Rural Panchayats	Rs.3.00 Lakhs

The franchisor shall release the security Deposit without any interest to the Franchisee after confirming that Franchisee does not have any dues to be paid to Franchisor. In case of any existing dues or claims, the Security Deposit shall be forfeited.

(b) Registration:

If application is considered for Franchise, Registration fee of Rs.11,800/- (Non-refundable Rs.10,000/- registration fee +GST @ 18% on Rs.10,000/-) is to be deposited alongwith security deposit before signing of agreement

(c) Pricing:

The Franchisor shall fix the MRP of Khadi and Village Industries products as per the directives issued by the KVIB on half yearly basis.

(d) Sales Target:

On par with the deposited amount as a Security deposit with the Khadi Board, (Franchiser) the required goods shall be lifted from the District Khadi Godown. And as a continuous process whenever the stock is diluted, the Franchisee can lift the goods then and there with respect to the said Security deposit.

(e) Supply Chain Management

On focussing the recent Technological Development in the marketing media supply chain management placing a major role in monitoring day to today activities programme and keeping the steadiness of process line being executed informally accordingly here Khadi Board is decided to adopt supply chain management in the admin of Franchisee.

(f) Transport:-

Transportation of the product from Franchisor to Franchisee will be borne by the Franchisee.

As far as Khadi Board is concerned, in every District Administration, there is one District Khadi Godown functioning and handling all the varieties of both Khadi and Village Industries products for lifting the same to all sales outlets. Hence Franchisee shall also lift the goods on par with their requirements by sparing Transport charges on his own from District Khadi Godown owned by the Khadi Board.

(g) Insurance:-

The Franchisee shall preferably insure all furniture, fixtures and civil works at its own cost and expenses. The Franchisee shall at its own cost, preferably insure for all the value of the stocks and cash available at the designated showroom.

(h) Agreement and Term Details

Once the entrepreneur applies to Khadi Kraft Franchise, Tamilnadu Khadi and Village Industries Board will communicate the applicant to understand their requirement and evaluated the requirement and the location. Then the applicant would be asked to sign “MoU” and the board will share detailed business information with the applicant. As soon as the entrepreneur confirm the approval, the franchise needs to sign a 3 years franchise agreement and it would be renewable.

7. General Terms and Condition of the Franchise:

1. Initially the franchise will be given for a period of three(3) years (“Validity Period”) and may be further extended for a period on such terms and conditions as mutually agreed by the Franchisor.
2. Khadi Kraft Franchisee will have the uniform design and pattern of signage approved by KVIB and display KHADI KRAFT logo prominently.
3. Franchisee should have at least minimum sales target of Rs. 10.00 lakhs per quarter and shall report to the Franchisor.
4. Franchisee should have at least minimum sales target of Rs. 10.00 lakhs per quarter and shall report to the Franchisor.
5. The Franchisee shall be an exclusive sales outlet for the products of Franchisor in the ratio of 75:25 (Khadi: Other products)
6. The Franchisee shall be solely responsible for complying with the provisions of various laws including laws relating to Shops & Establishment, GST, Commercial Tax and all other applicable taxes and shall be responsible for due compliance of the applicable law and payment of statutory liabilities.
7. The Franchisee shall sell the products not exceeding the prescribed M.R.P provided by the Franchisor / Suppliers.
8. The Franchisee shall sell the products not exceeding the prescribed M.R.P provided by the Franchisor / Suppliers.
9. The Franchisee shall sell the products at the Approved Showroom on its own account and not on behalf of Franchisor.
10. The Franchisee shall sell the products at the Approved Showroom on its own account and not on behalf of Franchisor.
11. The Franchisee shall sell the products at the Approved Showroom on its own account and not on behalf of Franchisor.
12. The Franchisee shall sell the products at the Approved Showroom on its own account and not on behalf of Franchisor.
13. The Sales target will be fixed every year by the Tamilnadu Khadi and Village Industries Board after conducting a Market Survey assessing the market potential of the Khadi and Village production in that location.
14. The proposed Franchisee selling our branded Khadi products must not indulge in purchase or selling of other branded products.
15. No goods should be purchased from any institutions as Khadi products except the products of Khadi and Village Industries Board.
16. No goods should be displayed and sort-out against the Gandhian principle.
17. No goods should be displayed and sort-out against the Gandhian principle.
18. The franchisee can advertise to develop market promotion of the products. The Franchisee, prior to carrying out any advertisement shall present the advertisement / publicity material for the approval of the Franchisor. The Franchisor / KVIB on its own may provide advertisement material to the Franchisee and the Franchisee shall use such material for advertisement of the products. The sales promotion and publicity activities may be worked out jointly between Franchisor and Franchisee, on cost sharing basis.
19. If the Franchisee executes any business with Franchisor, trade discount will be % in Khadi and % for Village Industries products to Franchisee.
20. This Agreement or any interest or benefit herein shall not be in any manner assigned or transferred by the Franchisee to any third party.
21. Franchisor shall have the right to terminate the Agreement forthwith by giving a three month notice in writing to the Franchisee.

Merits of Franchising

1. Shop will be opened from Morning 6.00 AM to 10.00 PM,
2. Up to deposit level our Khadi Products will be sold out,
3. Due to wholesale our Boards Turnover will be increased,
4. Our financial position will be increased,
5. No funds Block,
6. No DCB pending,
7. No Staff Salary,
8. No EB Charges,
9. No Rent,
10. No Transport Charges,
11. No TA Bill Expenditure,
12. Due to Franchises there will not be any complaints from public saying Khadi Kraft is always closed,
13. By implementation of Franchises our production will be increased,
14. Spinners, Reelers Weavers, Artisans will get regular employment, by the way Rural Economy will increase,
15. Due to Franchises Dedication and involvement in Khadi Wearing, Khadi Products using will become Public Movement.

Support for Franchisee

Tamilnadu Khadi and Village Industries Board offers the following services to the Franchise

1. 1. To provides support in site selections and for getting up the design and structuring of the store of franchise would request for the same.
  2. Field Assistance will be given to the franchise if it is needed.
  3. Expert guidance from the Tamilnadu Khadi and Village Industries Board will be provided to the Franchise while opening the Khadi Kraft Franchise.
  4. Advertising Pamphlets would provide to the Franchise with the push and grow off the business quickly.
  5. For promoting the brand name, advertisement to be provided such as Print Advertisement, FM Radio, web based e advertisement,You Tube, Instagram, Facebook etc.,