Apparel September 2019 Apparel September 2019 issue | Page 83

INDUSTRY INSIGHTS
MOVING BEYOND GOVERNMENT
CONTROL
Despite its recent success, a study by the Centre
for Public Policy Research (CPPR) and reports
by the Comptroller and Auditor General (CAG)
of India illustrates that KVIC has been generally
ineffective in utilising public funds, thereby
indicating significant wastage. The CPPR study
also observes that since KVIC maintains exclusive
control over the national khadi production, it
should do away with needless regulations for
permissions and permits for non-government
businesses. By enforcing such outdated and
bureaucratic means of control, KVIC poses as
a severe barrier to entry for new players in the
market. It also points out that the free-market
approach is far more effective in growing the
potential of the khadi industry. There are also
reports on how the existing regulations foster
corruption, since they have allowed for the
creation of fraudulent khadi-manufacturing units,
which benefit from KVIC rebates but actually
produce no khadi. By opening up to the free
market, khadi could experience benefits, not
only to grow as a product, but also to shed
corrupt practices.
The operations of KVIC are seen by many as
a needless means of control, as it comes at the
cost of limiting consumer options and the revenue
potential that khadi products and the fabric itself
could enjoy. The CPPR report also criticises KVIC
on how digitally backward its marketing and
distribution approach has been, which has further
limited its potential, contributing to the general
slow growth of the khadi industry over the last
70 years.
The khadi industry has always been ensconced
in a protective shell of regulatory control, which
has made ascertaining its true commercial
potential impossible. Today, however, more and
more entrepreneurs and consumers are flocking
towards new designs, styles, and ways of utilising
khadi. The revival of khadi has clearly begun,
THE KHADI INDUSTRY HAS
ALWAYS BEEN ENSCONCED
IN A PROTECTIVE SHELL OF
REGULATORY CONTROL, WHICH
HAS MADE ASCERTAINING ITS
TRUE COMMERCIAL POTENTIAL
IMPOSSIBLE.
but can it be sustained in the long term? This
decision is purely in the hands of the regulators,
not the consumers.
TRULY UNLEASHING KHADI
There is no denying that the success of khadi
has primarily been driven by Government support
but industry leaders and public panels have
pointed out that this in itself is unnecessary
since consumers do not care about it when
making purchases. The real criticism here is that
while khadi has achieved over R3,000 crore in
sales—its highest ever till date—it may actually
underrepresent its true potential. The question
then is whether it is time for the khadi industry to
be liberalised in its operations and join the rest of
the apparel industry?
APPAREL
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September 2019
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