Khadi and Village Industries (KVIC) Schemes in 2026: PMEGP, SFURTI, MMDA and How to Apply

The Khadi and Village Industries Commission (KVIC) is the government body behind khadi, village industries and, for most people searching for a "KVIC loan", the PMEGP subsidy scheme. This guide is for rural entrepreneurs, artisans, khadi institutions, NGOs and cluster promoters who want to know what KVIC actually funds in 2026, how much the latest Budget gives each scheme, and the right way to apply — because individuals, institutions and clusters each use a different door. Figures were checked against the 2026-27 Budget documents, KVIC guidelines and PIB releases as of October 2026.

Quick answer

KVIC is a statutory body under the Ministry of MSME that promotes khadi and village industries. Individuals reach its money mainly through PMEGP — a bank loan with a 15–35% subsidy, applied for online on the KVIC portal. Registered khadi institutions get Market Development Assistance and other support under Khadi Vikas Yojana, and artisan clusters get up to ₹5 crore under SFURTI.

• Budget 2026-27: PMEGP ₹4,500 crore, Khadi Gramodyog Vikas Yojana ₹1,094.51 crore, SFURTI ₹197.49 crore

• MMDA: 35% of prime cost (cotton/wool/polyvastra) and 20% of prime cost (silk), with a fixed share for artisans

• KVI sales in 2025-26: ₹1,87,105 crore (provisional), employing 2.04 crore persons

• KVIC does not lend directly — beware agents promising 'KVIC loans' for a fee

What KVIC is and how it works

KVIC was set up under the Khadi and Village Industries Commission Act, 1956 and began work in 1957. It is a statutory commission under the Ministry of Micro, Small and Medium Enterprises, headquartered in Mumbai. Its job is to plan, promote and finance khadi — cloth that is hand-spun and hand-woven — and a long list of "village industries", from food processing and honey to pottery, leather, paper, agarbatti and soap, with a focus on rural employment.

It works through three layers. KVIC's own state and divisional offices handle schemes and monitoring. State Khadi and Village Industries Boards (KVIBs), created under state laws — the UP, Kerala, Tamil Nadu, Delhi and Telangana boards are among the most searched — run state programmes and act as implementing agencies for central schemes such as PMEGP. And thousands of khadi institutions — registered societies, trusts and cooperatives — actually employ the spinners and weavers, run production centres and sell through Khadi Bhandars and Khadi India outlets. Only cloth made under KVIC's certification system and carrying the Khadi Mark can be sold as khadi.

The sector has grown fast. KVIC's provisional data for 2025-26, released on 26 May 2026, puts sales of khadi and village industries products at ₹1,87,105 crore against ₹31,154 crore in 2013-14, and production at ₹1,25,296 crore. Employment reached 2.04 crore persons. Khadi cloth itself is a small slice: sales of about ₹7,869 crore. Spinners' remuneration has risen from ₹4 to ₹15 per hank over the same period.

Khadi and village industries (2026 data)

₹1,87,105 crore

KVI sales, 2025-26

provisional

2.04 crore persons

People employed

₹4,500 crore

PMEGP, BE 2026-27

₹1,094.51 crore

Khadi Gramodyog Vikas Yojana, BE 2026-27

The schemes and their 2026-27 outlays

Most of KVIC's programme money flows through four lines in the Ministry of MSME's budget (Demand No. 68). The Budget Estimate for 2026-27 compared with the revised figure for 2025-26 shows where the government is putting money.

Three things stand out. PMEGP's allocation jumps to ₹4,500 crore, signalling the government intends to keep the scheme going after its 2021-26 approval cycle ended. Khadi Vikas Yojana, which carries MMDA, rises to ₹581.28 crore. And SFURTI, which spent almost nothing in 2024-25, has ₹197.49 crore after ₹140 crore in the revised 2025-26 estimate. The Budget speech for 2026-27 also announced a Mahatma Gandhi Gram Swaraj initiative to strengthen khadi, handloom and handicrafts through global market linkage, branding, training, skilling and process quality. As of October 2026 we had not found its detailed guidelines.

PMEGP: the KVIC scheme for individuals

For an individual who wants to start a unit, PMEGP is what "KVIC loan" means. KVIC is the national nodal agency: it runs the online portal, releases the margin money subsidy and monitors the scheme, while state KVIC offices, KVIBs and District Industries Centres act as implementing agencies and banks lend. The subsidy is 15% to 35% of project cost depending on your category and whether the unit is rural or urban, on projects up to ₹50 lakh in manufacturing and ₹20 lakh in services. You contribute 5–10% and the bank lends the rest.

In 2025-26, KVIC reports, 66,494 new PMEGP units were set up, generating employment for more than 7.31 lakh people. We have a full guide covering eligibility, the subsidy table, EDP training, documents and the second loan: read our PMEGP loan guide before applying.

When you apply, choose KVIC, the KVIB or the DIC as your agency. Village-industry projects in rural areas often go through KVIC or the KVIB, which also run EDP training centres. There is no separate "KVIC loan" application outside PMEGP for individuals, so treat anyone selling one as a red flag.

A village-industry example in ₹

Take a woman in a rural block of Madhya Pradesh planning a honey processing and packing unit with a project cost of ₹10,00,000 — machinery, a small work-shed on rented premises and working capital. As a special-category applicant in a rural area she contributes 5%, ₹50,000. The bank lends ₹9,50,000. KVIC releases a margin money subsidy of 35%, ₹3,50,000, which sits in a term deposit in her name for 3 years and is then adjusted against the loan if the unit passes physical verification. A general-category applicant in an urban area would put in ₹1,00,000 and receive 15%, ₹1,50,000. Because the project is above ₹5 lakh, she would need at least 10 days of EDP training before the subsidy claim.

KVIC, KVIB or DIC: which agency to pick

On the PMEGP portal you choose one implementing agency. KVIC's state offices and the state KVIBs are oriented to village industries and rural units, and many run their own training centres; the District Industries Centre handles a wider range of manufacturing and service projects and is often closer to urban applicants. The subsidy and bank terms are the same whichever you choose. Pick the agency with an office near you and a record of processing files quickly — local entrepreneurs, the bank branch and the Lead District Manager are good sources for that — because the agency forwards your application to banks and follows up on sanction. This is also where most applicants trip up: once you select an agency, the file stays with it, so changing your mind later means delays. Ask the agency at the outset how long its task force committee usually takes to forward applications, which banks it works with most often in your block, and when its next EDP batch starts.

Khadi Vikas Yojana and MMDA: support for khadi institutions

Khadi Gramodyog Vikas Yojana (KGVY) is the umbrella under which the Ministry merged KVIC's khadi and village-industry schemes from 2018-19. Its khadi arm, Khadi Vikas Yojana, funds khadi institutions rather than individuals. The largest component is Modified Market Development Assistance (MMDA), introduced from the third quarter of 2016-17.

Who can claim it. Khadi institutions affiliated with or registered under KVIC or a State/UT KVIB, and KVIB units, that hold a valid Khadi/Polyvastra certificate and Khadi Mark certificate and whose annual budget KVIC has approved.

How much. MMDA is 35% of prime cost for cotton, muslin, wool and polyvastra, and 20% of prime cost for silk khadi. Prime cost here means the cost of raw material plus conversion charges up to grey cloth plus processing — excluding margins for establishment, trading, insurance and bank interest. Khadi made for government rate contracts doesn't get MMDA, though artisans and karyakartas on those orders get a smaller incentive of 17.15% of prime cost.

Who gets the money. For cotton, wool and polyvastra, the MMDA is split: producing institutions 34%, selling institutions 17%, artisans 35% and karyakartas (workers who run production and sales) 14%. For silk the split is 40%, 20%, 30% and 10%. The artisans' share must be paid into their bank or post office accounts as an incentive or bonus. Institutions must spend their share on things such as tools and equipment, designers, value addition, technicians for charkhas and looms, outlet computerisation and renovation, mobile sales vans, exhibitions and sales discounts.

How it's paid. Quarterly, against the approved target, through KVIC's online portal. Sale prices of khadi are no longer tied to the regulated cost chart, so institutions can price at market rates while MMDA is still calculated on the cost-chart prime cost.

How MMDA reaches the artisan (cotton khadi)

Step 1

Institution produces khadi at regulated prime cost

Step 2

KVIC releases MMDA quarterly via portal

Step 3

Institutions keep 51%

34% producing + 17% selling

Step 4

Artisans get 35%

to bank/post office accounts

Step 5

Karyakartas get 14%

Worked example in ₹

A khadi institution produces cotton khadi with a prime cost of ₹40,00,000 in a quarter.

• MMDA at 35% of prime cost: ₹14,00,000
• Spinners and weavers (35%): ₹4,90,000, paid into their accounts
• Karyakartas (14%): ₹1,96,000
• If the institution both produces and sells, it keeps 51% — ₹7,14,000 — for production and sales development

The same prime cost in silk khadi would attract ₹8,00,000 at 20%, with ₹2,40,000 (30%) going to reelers, spinners and weavers.

Khadi Vikas Yojana also includes an interest subsidy for khadi institutions' working capital loans (the Interest Subsidy Eligibility Certificate, ISEC), under which the institution pays a concessional rate and KVIC pays the rest of the interest to the bank, along with other development components. Check the current guidelines with your KVIC state office, because component limits are revised periodically.

Gramodyog Vikas Yojana: village industries

The village-industry arm of KGVY, Gramodyog Vikas Yojana, funds programmes for specific traditional activities — for example beekeeping, pottery, leather, agarbatti and food processing — typically through training and distribution of improved tools and equipment to artisans, and through common facilities. Its allocation is small compared with khadi (₹87.13 crore in 2026-27), so it works through targeted programmes announced by KVIC state offices rather than open applications. Ask your nearest KVIC or KVIB office which programmes are taking beneficiaries in your district this year.

If you are an individual artisan in one of the traditional trades, also look at PM Vishwakarma, which gives a toolkit incentive, training stipend and a concessional loan directly to registered artisans.

SFURTI: funding for artisan clusters

The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) organises traditional artisans into clusters and funds shared infrastructure so they can compete. KVIC is a nodal agency for khadi and village-industry clusters, and the Coir Board for coir clusters, with other nodal agencies appointed by the Ministry. A Lok Sabha reply on 12 March 2026 said 513 clusters had been approved with ₹1,332.95 crore of government assistance, expected to benefit about 3.03 lakh artisans; 378 were operational.

Under the 2020 revised guidelines, a cluster can get up to ₹2.5 crore if it has up to 500 artisans, and up to ₹5 crore above 500. Smaller clusters can be proposed if they have at least 100 artisans (50 in the North-East and hill areas), with proportionate funding.

SFURTI funding pattern (2020 guidelines)

Component	Scheme funding	Limit	Implementing agency share
Soft interventions (training, design, capacity building)	100%	10% of hard interventions or ₹25 lakh, whichever is less	Nil
Hard interventions (common facility centre, raw material bank, training centre)	90% (95% in NER, J&K, hill states)	Within the cluster ceiling	10% in cash (5% in NER etc.)
Technical agency cost	100%	8% of hard interventions or ₹30 lakh	Nil
Implementing agency / SPV cost	100%	8% of hard interventions or ₹20 lakh	Nil

Soft interventions (training, design, capacity building)

Scheme funding

100%

Limit

10% of hard interventions or ₹25 lakh, whichever is less

Implementing agency share

Nil

Hard interventions (common facility centre, raw material bank, training centre)

Scheme funding

90% (95% in NER, J&K, hill states)

Limit

Within the cluster ceiling

Implementing agency share

10% in cash (5% in NER etc.)

Technical agency cost

Scheme funding

100%

Limit

8% of hard interventions or ₹30 lakh

Implementing agency share

Nil

Implementing agency / SPV cost

Scheme funding

100%

Limit

8% of hard interventions or ₹20 lakh

Implementing agency share

Nil

The implementing agency — an NGO, a government or semi-government institution, a panchayat body or a private company — must bring the land, which isn't funded. A cluster-specific special purpose vehicle (SPV) with artisan representation must be formed before final approval; khadi institutions are treated as SPVs under the KVIC model. A private-sector implementing agency has to contribute at least half the project cost excluding land. Funds are released in instalments against progress.

How to apply: which door is yours

Applying to KVIC schemes

1. 1

   Individual starting a new unit → PMEGP

   Apply online on the KVIC PMEGP portal, choose KVIC, KVIB or DIC as agency, upload your project report, complete EDP training and wait for bank sanction.

   Read our PMEGP guide
2. 2

   Khadi institution → registration and Khadi Mark first

   Register or affiliate with KVIC or your state KVIB, obtain the khadi certificate and Khadi Mark, and get your annual programme approved. Then claim MMDA quarterly through KVIC's online portal.

3. 3

   Artisan group or NGO → SFURTI cluster

   Identify an implementing agency and technical agency, form an SPV, secure land and prepare a detailed project report. Submit through a nodal agency such as KVIC; the Scheme Steering Committee approves.

4. 4

   Traditional artisan → village industry programmes

   Ask the KVIC state office or KVIB about current Gramodyog Vikas Yojana programmes for your trade, and check PM Vishwakarma eligibility.

Before any application, get your Udyam registration: it's free, takes minutes and is asked for by banks and agencies.

Common mistakes and how to avoid them

Paying agents for a "KVIC loan". KVIC doesn't sell loans or certificates through agents. PMEGP applications are free on the portal; EDP training is arranged by the agencies.

Applying for MMDA as an individual. MMDA goes to registered khadi institutions, which then pass the artisans' share on. A weaver gets it through the institution she works for, not by applying herself.

Selling "khadi" without certification. Using the word khadi or the Khadi India mark on cloth that isn't certified hand-spun and hand-woven invites action from KVIC. If you sell handloom made from mill yarn, call it handloom.

Treating SFURTI as a grant for one business. SFURTI funds shared facilities owned and run by a cluster SPV. A proposal that benefits a single promoter will not be approved.

Ignoring the land condition. SFURTI doesn't pay for land and many proposals stall because the implementing agency hasn't secured it. Settle land and title before you prepare the project report.

Assuming last year's limits. Component limits and outlays change. The PMEGP approval cycle ended in March 2026 even though the 2026-27 Budget allocates ₹4,500 crore to it, and the new Gram Swaraj initiative's details are still awaited. Confirm current terms with the KVIC state office before you invest.

Official KVIC and ministry links

• KVICSchemes, notifications, state offices
• PMEGP e-portal (KVIC)Apply for PMEGP
• MMDA guidelines (PDF)Rates, eligibility and distribution
• Notes on Demands for Grants 2026-27, Ministry of MSMEScheme-wise outlays
• Ministry of MSMESFURTI and other schemes

What to do next

If you are an individual with a business idea, start with numbers: list your machinery and running costs in the startup cost calculator, check the loan instalment after subsidy with the EMI calculator, and then read the PMEGP guide. If you run or plan a khadi institution or artisan cluster, contact your KVIC state office to confirm the current year's targets and components before preparing a proposal. For smaller needs without a subsidy, compare a Mudra loan.

This is general information, not legal or financial advice — confirm on the official source or with your KVIC or KVIB office.

Frequently asked questions

Does KVIC give loans directly?

Not to individuals as a lender. The 'KVIC loan' people search for is usually PMEGP: you apply on the KVIC PMEGP portal, a bank gives the loan, and KVIC releases a margin money subsidy of 15–35% of project cost through the bank. KVIC also funds registered khadi institutions and cluster projects under its own schemes, but for an individual starting a unit, PMEGP is the route.

Khadi and Village Industries Commission comes under which ministry?

KVIC is a statutory body created by the Khadi and Village Industries Commission Act, 1956, and works under the Ministry of Micro, Small and Medium Enterprises. Its head office is in Mumbai, with state and divisional offices across the country. State Khadi and Village Industries Boards are separate bodies set up by state laws that work alongside it.

What is Market Development Assistance (MMDA) for khadi?

Modified Market Development Assistance is KVIC's support for khadi production and sales. It is paid to eligible khadi institutions at 35% of prime cost for cotton, muslin, wool and polyvastra, and 20% of prime cost for silk khadi, and a fixed share must reach artisans: 35% of the cotton/wool amount goes to spinners and weavers through their bank or post office accounts.

How much funding does SFURTI give a cluster?

Under the 2020 revised guidelines, a regular cluster of up to 500 artisans can get up to ₹2.5 crore and a major cluster of more than 500 artisans up to ₹5 crore. Soft interventions such as training are fully funded within limits; hard interventions such as common facility centres are 90% funded, with a 10% cash contribution from the implementing agency (5% in the North-East, J&K and hill states).

What was KVIC's turnover in 2025-26?

According to provisional data released by KVIC on 26 May 2026, sales of khadi and village industries products reached ₹1,87,105 crore in 2025-26, with employment of 2.04 crore persons. Khadi textile sales alone were about ₹7,869 crore. Village industries — food processing, honey, pottery, leather, agarbatti and many others — make up most of the total.

How much did Budget 2026-27 allocate to KVIC schemes?

The Ministry of MSME's demand for 2026-27 provides ₹4,500 crore for PMEGP, ₹1,094.51 crore for Khadi Gramodyog Vikas Yojana (including ₹581.28 crore for Khadi Vikas Yojana and ₹87.13 crore for Gramodyog Vikas Yojana) and ₹197.49 crore for SFURTI. The Budget speech also announced a Mahatma Gandhi Gram Swaraj initiative for khadi, handloom and handicrafts.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 7 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.KVIC achieves historic turnover of Rs 1.87 lakh crore in FY 2025-26 — PIB (Ministry of MSME), 26 May 2026 · accessed 7 October 2026
2. 2.Notes on Demands for Grants 2026-27 — Demand No. 68, Ministry of MSME — Ministry of Finance (Union Budget) · accessed 7 October 2026
3. 3.Budget Speech 2026-27 (para 24: Mahatma Gandhi Gram Swaraj initiative) — Ministry of Finance · accessed 7 October 2026
4. 4.Modified Market Development Assistance — guidelines (07-12-2022) — KVIC · accessed 7 October 2026
5. 5.Revised Guidelines for SFURTI (approved 2.3.2020) — Ministry of MSME (hosted by Invest India) · accessed 7 October 2026
6. 6.MSME Ministry completes 364 cluster projects; SFURTI revives traditional industries — Organiser, 15 Mar 2026 (Lok Sabha reply of 12 Mar 2026) · accessed 7 October 2026
7. 7.Khadi-village industries product sales cross Rs 1.87 lakh cr in FY26 — All India Radio News · accessed 7 October 2026