KHADI AND VILLAGE INDUSTRIES COMMISSION DIRECTORATE OF KHADI COORDINATION

3, IRLA ROAD, VILE PARLE (WEST), MUMBAI-56

Telefax +91-22-2671 5860 e-mail: sksinha@kvic.gov.in Web: www.kvic.org.in

No. DKC/DL/Policy/2008-09

Date: 09.07.2008

STANDING ORDER NO.1672

Sub: Guidelines for certification / registration (direct enlistment) of Khadi and Polyvastra institutions reg. The Commission in its 554th meeting held on 16.02.2008 has taken a very important decision to open up enlistment of new institutions organized and managed by people belonging to all social categories. The decision of the Commission has already been notified to the field offices vide Circular No. DKC/DL/Policy/2007-08 dated 08.03.2008. 2. It has been observed that the existing guidelines for enlistment of institution and that of issuing new khadi certificate are not congruent and therefore it takes lot of time for their processing. Moreover, though there is a prescribed format for certification of new khadi institutions but no such prescribed format is available for registration. Such a situation poses great difficulty not only to the institution but also to the offices as there is no compatible system for certification and direct enlistment. Moreover, both of the wings work in a disjoined manner thereby the pace of direct enlistment and certification cannot pick up. 3. The present situation has thrown up a challenge to the KVIC to rise to the occasion and simplify the existing procedure so that the system of certification and enlistment become smooth and effective. 4. The issues related to present system of certification / registration (direct enlistment) has been deliberated in detail, in the said Commissions meeting and the salient features of the modalities / procedure to be adopted in the said processes are as follows: a) Single application both for certification as well as direct enlistment. b) The form takes care of the entire requirement that of certification as well as enlistment. c) The processing of papers for certification and enlistment are to be done in such a manner so that over lapping as well as duplication is avoided. d) CCC Wing while issuing khadi certificate has to take the concurrence of Legal Wing of KVIC in order to have perfect scrutiny of the bye laws submitted by institution. e) Commission has already decentralized the direct enlistment work for Village Industrial units assigning the work to the Zonal Dy. CEOs. In the similar fashion the enlistment of
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Khadi/Polyvastra institution has been proposed in the revised guidelines at the level of Zonal Dy. CEOs. f) The Programme Director will only process the budget part of the institution in order to save time and work with speed. g) The Director (KC) will arrange to collect information from all concerned and make available the same on the website for keeping track on the institutions. 5. The revised guidelines for certification / registration (direct enlistment) of institutions/societies with KVIC is attached at Annexure-I. 6. The prescribed application format for certification / registration (direct enlistment) of institutions/societies with KVIC is attached at Annexure-II. 7. All State / Divisional Directors of KVIC are advised to follow the above guidelines meticulously while processing the application for issue of new Khadi/Polyvastra certificate as well as enlistment of new institutions under the fold of KVIC.

Encl : As above

CHIEF EXECUTIVE OFFICER

To 1. Zonal Dy. Chief Executive Officers (N.Z. / S.Z. / E.Z. / W.Z. / C. Z. / N.E.Z.) 2. All Directors / In-charge, State / Divisional Offices, KVIC.

Copy for favour of information : 1. All Members of the Commission. 2. Chairman, Central Certification Committee 3. All Members of Central Certification Committee 4. Chairmen of the Zonal Certification Committees (NZ/SZ/CZ/EZ/NEZ/WZ) 5. Chief Vigilance Officer 6. All Members of the Zonal Certification Committees 7. All Programme / Industry Directors 8. Secretary to Honble Chairperson 9. O.S.D. to Chief Executive Officer. 10. Accounts Officer, Financial Advisor Cell. 11. Director (Information Technology) for placing the circular on web site. 12. Director (Publicity) with a request to publish the same in the ensuing issue of Jagriti. 13. Circular file

CHIEF EXECUTIVE OFFICER

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Annexure-I

Revised guidelines for certification / registration (direct enlistment) of institutions/societies with KVIC
1. a) b) c) 2. Eligible entities A society registered under the Society Registration act 1860 (Act XXI of 1860) or under any law, for the time being in force of any State. A Co-operative Society registered under the Co-operative Society act 1812 (Act II of 1812) or under any law for the time being in force of any State. A Trust created for Public purposes of a Charitable or religious nature. Status of eligible entities The institutions opting for being directly enlisted with KVIC can be classified in the following groups: a) New institutions (Which have been recently registered and not availed of any assistance from KVIC for implementation of KVI programmes) and desirous of undertaking both Khadi & Polyvastra Programmes. New Institutions of category 2(a) but desirous of taking up only Khadi programmes. New institutions of category- 2(a) but desirous of taking up only Polyvastra Programmes Registered institution which are already implementing various other social upliftment activities- other than KVI programmes - are now desirous of direct enlistment with KVIC for the purpose of implementation of KVI programmes. Institutions / Societies which are already implementing Khadi or V.I. or both activity but are assisted by respective Khadi & V.I. Boards of the States. Institutions / Societies which are already implementing V.I. programmes- but desirous to taking up Khadi programme including Polyvastra. Institutions / Societies which are already implementing Khadi and/ or V.I. programmes but neither enlisted with KVIC / KVIB nor possess valid Khadi/ Polyvastra Certificates, but desirous to avail financial and technical assistance from KVIC, including those who were once enlisted and Khadi / Polyvastra Certificates issued and subsequently became inoperative. Registered Federation / Association of Khadi & V.I. of National / State / District or Block level, formed as per Guidelines issued by KVIC.
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b) c) d)

e) f) g)

h)

3. a) b)

The entities desirous of certification and enlistment must have following provisions / clauses in their Memorandum of Association / bye-laws: Whether the constitution of the institution provides to implement KVI activities as per the guidelines issued by the KVIC from time to time. Whether the constitution of the institution provides nomination of adequate representative in the Managing Committee of the institution from people belonging to SC/ST, Minorities, Women and artisans. Whether the constitution authorizes the institution to take up Khadi and / or V.I. activities. Whether the constitution empowers the institution to borrow funds from the Commission, mortgage and hypothecates its immovable and movable properties as securities to the Commission. Whether the constitution empowers the institution to borrow funds from the banks on the basis of ISEC issued by the Commission and to mortgage / hypothecates their properties as security to the bank. Whether the constitution provides that in respect of any change in office bearers, Commission is kept informed of it, at once. Whether the constitution provides that the Commissions Officials can under take inspection of its registers, books of accounts and other allied documents as when it deemed fit. In case of institutions belonging to the category of 2(d), if those are interested to take up training and other S&T projects shall make any amendment in their Memorandum of Association. Whether the constitution provides dissolution clause as prescribed in the model byelaws. KVIC has already circulated model bye-laws/Memorandum of Association, institutions, if desire, may make use of the same. Definition of SC/ST/Women/Minorities/OBC institutions: The minimum number of members in the General Body must be 2/3 rd belonging to the said category for which the institution applied and to maintain the same for ever to continue under reserved category, any violation, the recognition (Direct Listing) automatically stands cancelled and all consequential benefits are liable for withdrawal. Out of the core Office Bearers- Chairman / President, Secretary, Treasurer two persons must be belonging to reserved category for which it has applied.

c) d)

e)

f) g) h)

i) NB.: 4.

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5.

Furnishing of Documents While submitting the application for direct enlistment, the following documents would be required.

a) b) c) d)

Attested Xerox copy of the registration certificate of the Society/ institution. Attested copies of Registered Memorandum of Association confirming the model byelaw issued by the KVIC, or the clauses mentioned under 3 (a) to (i). Latest list of Managing Committee duly certified by the Registering authority. Bio-Data of each Office bearer/Managing Committee members with photograph duly attested. (Attested copies of Ration Card, Voter Identity Card for proof of identity as well as residence). The statement of accounts of the institutions / Societies, in original, duly signed by the Charted Accountant / Statutory Auditors and countersigned by the Office bearers, along with certified copies of statements of Bank Accounts. The institutions desirous of direct listing must submit an affidavit that they will bring in / mobilize minimum own capital of Rs.1.00 lakh preferably in the form of fixed assets to enable create Equitable Mortgage at the time of receiving budget from KVIC. However, at the time of certification/direct enlistment the institution has to produce a certificate form the manager of the transacting branch about minimum deposit of Rs. 20,000/- in the name of the institution. The Institutions/Societies which are enlisted with State Khadi & V.I. Boards and desire to come to the direct list of KVIC will require to furnish the following (i) Reasons for switching over of affiliation to KVIC (ii) Outstanding loan balances to KVIB and other financing institutions and how those are to be settled (iii) No Objection Certificate from the State Board concerned. Foreign Funded Institutions: Institutions receiving foreign aid may be considered for direct listing provided audited accounts of institutions certified by the Charted Accountants mention that, the institutions did not receive any funds from other sources including foreign aid, for the same purpose for which the Commission extended financial assistance in order to avoid double funding.

e) f)

g)

6.

7. a)

Modus operandi On receipt of request from new societies, the State/Divisional Office of KVIC has to reach out to them for conducting feasibility. The main objective of the study would be to guide the institution in acquiring first hand information about the nitty-gritty of Khadi activities, formalities to be accomplished and steps to be taken to effectively organize the Khadi activity. The KVIC official (not below the rank of Assistant Development Officer) conducting feasibility should help the society to complete all formalities required for Khadi
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b)

certification as well as registration. He may also assist the society to prepare an action plan based on his feasibility study. c) The papers submitted by the society are to be processed on a fast track at the State/Divisional office for granting new Khadi certificate as well as registration. State/Divisional Directors will collect application form from institutions in triplicate and forward one copy each to Director (CCC) and zonal Dy. CEO after retaining a copy at his office. The prescribed application form is attached as Annexure. Director (CCC) will arrange to issue Khadi/Polyvastra certificate after the bye-laws are vetted by Legal wing of KVIC. Zonal Dy. CEOs will arrange to issue enlistment / registration / memorandum after scrutiny of financial aspect. The State/Divisional Director is authorized to form a budget team consisting of State/Divisional Director, representative of Finance, representative of Khadi Programme etc., to recommend the targets for such institutions and the Khadi programme Directorate in Central Office has to arrange speedy sanction of their budget as well as provision of implements and raw material on priority. State/Divisional Directors of KVIC may extend all supports to these institutions to start and continue Khadi activity so that they do not face much difficulty in organizing Khadi activity. Nevertheless it is also imperative on the part of the institution to complete required formalities for purchase of land and mortgage the same with KVIC, as it is very essential to process budget and release fund. KVIC has already formed Performance Appraisal Committee comprising of Zonal Member, Chairman, Zonal Certification Committee and Zonal Dy. Chief Executive Officer and activities of new institutions may also be brought under their purview to have periodic monitoring and review of performance through an arrangement mentioned latter. The field offices are advised to make wide publicity so as to reach beneficiaries of even remote areas so that the performance level of KVI sector can be doubled during the XIth five year plan. The Zonal Dy. CEOs are requested to furnish the details of such institutions (State/Divisional Office-wise) registered by them to the Director (KPM) from time to time and the information thus gathered will be made available in KVIC's official website. Similarly, Director (IT) will arrange to display the name of such institutions that are certified by the Committee in the KVIC website. Authorities to accord direct listing and issue of certificate The authority for issuing new certificate will be the Central Certification Committee and Zonal Dy. Chief Executive Officers will be the authority for direct enlistment. The institution should be given only one certificate and the same will make it entitled to produce and / or sale any variety of Khadi.

d)

e)

f)

g)

h)

i)

8. a)

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b)

The institution should obtain Khadi / Polyvastra Certificate within one year from the date of receipt of direct listing, failing which the said recognition of direct listing automatically stand cancelled. Similarly, an institution should obtain registration within one year from the date of receipt of Khadi Certificate otherwise the certificate will stand automatically cancelled. The institution should start Khadi activity within one year from the date of certification / enlistment whichever is latest. Otherwise, the khadi Certificate and enlistment will stand automatically cancelled. The Director (KPM) once in a quarter submits progress report on direct listing to the Commission for information. Feasibility for Direct Listing - Role of State/Divisional Directors State /Divisional Director should ensure and satisfy himself, about the genuineness of the institution and its capability to under take the programmes of Commission efficiently as well as the safety and security of the Commissions funds with the institution. In this regard, he may make reasonable inquiries into the reputation and credit worthiness of the office bearers of the institution and also invariably verify original registration certificate. The members of the managing committee should not be in relation by blood or marriage. In case of Khadi or Polyvastra programme they must be habitual Khadi wearers and have no connection with mill-cloth, millyarn or un-certified Khadi. The members should not have the background of Khadi institution affiliated to KVIC/State KVIB where 19-B action initiated, certificates cancelled, vigilance cases launched. In case of institutions enlisting for Khadi and or Polyvastra activity, availability of raw material, availability of artisans, availability of trained and /or experienced technical karyakarthas, account knowing persons, availability and readiness to procure tools and equipment, financial resources for conducting activity be ensured. The technical feasibility must be, got conducted by the Khadi technical personnel of the field offices. During feasibility study KVIC official must collect documentary proof of existence of registered office of the institution. The State /Divisional Directors should ensure that, the institutions own fund is not kept merely in the form of bank deposits or liquid cash etc,. Those are invested in the form of immovable property or fixed assets to substantial extent, which can be mortgaged to the Commission for security to the Commissions funds. The State/Divisional Directors will send Direct Listing proposals to respective Zonal Dy. CEO for consideration and issuance of letter of registration (Direct Listing). The office of Zonal Dy. Chief Executive Officer will consider the financial aspect of the office processing part to consider direct enlistment. The State /Divisional Directors will recommend for issuance of Khadi and/or Polyvastra Certificate to Central Certification Committee under intimation to Zonal Certification Committee concerned. The Office of Central Certification Committee will arrange to
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c)

d) 9. a)

b)

c)

d)

e)

f)

issue Khadi and Polyvastra Certificate after the bye-laws etc. is vetted by Legal Wing of KVIC. g) The State/Divisional Directors after recommending for Khadi and/or Polyvastra Certificate allow the institution for participating in the annual budget discussions. The programme to be given to the new institution should be economically viable say minimum one unit of implements and proportionate sales outlets. State/Divisional Directors after annual budget sanctions ensure procurement of raw material from CSPs, coverage of artisans under Khadi Karigar Janashree Bhima Yojana (JBY) as well as under State Level Artisan Welfare Trust by the institutions. Periodical Technical-monitoring visits of at-least three in a financial year is a must, for the first three years and report thereon may be furnished to the Directorate of KPM. Monitoring Implementation of the programme would be supervised through a Nodal Officer having technical background, assigned for the task by State / Divisional Director. Monitoring of programme implementation by institution will be monitored and reviewed by Standing Performance Monitoring Committee (SPMC). Monthly progress reports in respect of production, sales and employment will be collected in prescribed formats. There will be quarterly review of implementation of the scheme at the State level by SPMC and half-yearly review at the zonal level by the Zonal Committee. Financial sanction for the project to individual institution will take place in the following manner :i. Budgeting at State/Division office level through the field level budget team. ii. Approval of target etc. by Standing Finance Committee of KVIC. Release of fund through field office of KVIC is against compliance of prescribed guideline. 11. Fee to be charged for Certification and direct enlistment The institution applied for certification and recognition (Direct Listing) by the Commission, will have to pay certificate / registration or direct listing fee of Rs. 1000/(Rupees One Thousand Only) each, in favour of Chief Executive Officer, Khadi & Village Industries Commission by way of crossed Demand Draft(s) payable at State Bank of India, Vile Parle (West), Branch Mumbai and forward the same along with the proposal. The State/Divisional Offices on receipt of Demand Draft(s), issue acknowledgement and credit to the Internal Resource Generation (IRG) Account under intimation to Office of Central Certification Committee and Zonal Certification Committee as well as Khadi Coordination and Khadi Programme and Monitoring and also Director (Accounts). The Fees once paid are not refundable. Mere payment of fee does not confer any right to the institution unless and other wise, all the conditions are fulfilled.

h)

10. a)

b)

c) d)

******
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Annexure-II

APPLICATION FORM FOR CERTIFICATION / REGISTRATION (DIRECT ENLISTMENT) OF KHADI AND POLYVASTRA INSTITUITONS
(NAME OF THE STATE/DIVISIONAL OFFICE: )
To 1. Chairman, Central Certification Committee 2. Zonal Dy. Chief Executive Officer (_________ Zone), KVIC

PART I
I. 1. 2. 3. 4. 5. 6. GENERAL (To be filled in by the Secretary / Chairman of the institution) Name and full address of Institution : (Headquarters & Place of work). Registration Particulars (Number, Date & Act under which registered). :

Attested copy of Memorandum of Association / : Bye-laws. N.O.C. from State Board (strike out which are not applicable) Activity proposed to be taken up by institution. : Obtained / Not obtained / Not applicable : Khadi / V.I. / Khadi & V.I. both. Yes / No

Whether Khadi / Polyvastra certificate obtained. If : yes, please state certificate No. and valid / renewed up to and a copy may be attached.

7.A) Name of the place where the institution aimed to : open production centre with the details of spinners and weavers B) Estimated annual production (Rs. In lakhs) :

8.A) Name of the place where the institution aimed to : open sales outlets. B) Estimated annual sales (Rs. In lakhs) 9. : Yes / No Yes/No Yes/No
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NOC from local authorities in conducting Khadi / : PV activities

10. Resolution of Managing Committee approaching : KVIC for certification and direct enlistment for implementation of Khadi programme 11. List of Managing Committee Members/ Trustees : with Photos, Voters Identity card/ration card

alongwith bio-data of all furnished by the institution. 12. Copy of Caste Certificate if the institution belongs : to SC/.ST / OBC 13. Declaration that no staff members of KVIC/ State : KVIB or his / her family members have promoted this institution (no blood relation with other Committee members) as required in terms of Circular No.Adm/II/492/ 92-93 dated 23-12-92. 14. Particulars of payment of Certification fee and : Registration Fee of Rs.1000/- each drawn in favour of C.E.O., KVIC, Mumbai. a) Certification b) Registration / Direct Enlistment : : DD No. Yes/No Yes/No

Date

Bank & Branch

15. Details of Capital : Capital invested by the institution : Capital borrowed : Total Capital : 16.. Certificate of Bank regarding Bank Account and : own funds (A minimum amount of Rs.20,000/needs to be maintained) 17. Details of immovable property available in the : name of institution a) Land (area and value) b) Building (area and value) 18. Details of Annual Accounts : : :

Yes/No

a) Estimated Income Expenditure statement for : totally new institution b) Copy of balance sheet for working institution : 19. Submission of an undertaking to pay artisans : strictly as per CCC and KVIC guideline. 20. Submission of an undertaking to the effect that, : the institution will regularly deposit the AWF in the AWF & Pension Trust. 21. Submission of an undertaking to the effect that, : the institution will enroll all the existing as well as future artisans in the Jana Shree Bima Yojana and AWFT. Yes/No Yes/No. Yes/No.

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22. Submission of an undertaking to the effect that, : the institution shall purchase the raw material strictly in accordance with KVIC guidelines.

Yes/No.

I/we solemnly affirm implementation of Khadi / Polyvastra programme in accordance with the guidelines issued by Commission and also Central Certification Committee. I/we will never do anything that may infringe ethos of Khadi. Further, I/we promise to return the Khadi/Polyvastra Certificate / Registration letter on expiry of their period or on being informed of their cancellation. I/we do hereby declare that what is stated above is true to the best of my / our information and belief. Place: Date: (SIGNATURE OF THE SECRETARY) With seal

FOR OFFICE USE

PART II
I. Recommendation of State/ Divisional : Director (The State/Divisional Director on the strength of his satisfaction as to the reputation, credit worthiness, capability to implement the KVI programme by the institution only to record recommendations). 1. Recommended for Certification/ Not recommended for Certification. 2. Recommended for Registration/ Not Recommended for Registration.

SIGNATURE OF STATE/DIVISIONAL DIRECTOR To 1. Director (CCC), KVIC, Mumbai-56 2. Dy. Chief Executive Officer (_____ Zone), KVIC.

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PART-III
II. LEGAL ASPECT FOR CERTIFICATION ONLY (Director CCC to finalize in consultation with Director Legal Affairs) 1. Bye-laws of the institution prepared on the lines of Model Bye-laws : prescribed by the Commission. 2. Provision for undertaking Khadi / V.I. / Khadi & V.I. activities in the : bye-laws of the institution. 3. Provision to take loan / grants from KVIC in the bye-laws of the : institution. 4. Provision to take loan from Banks / other Financial Institutions in : the bye-laws of the institutions. 5. Provision to create Equitable Mortgage and execute : Hypothecation Deed of immovable and movable properties to KVIC / Financing Institution in the bye-laws of the institution. 6. Re-loaning clause to provide tools & equipments to individual : artisans after obtaining loan from KVIC / Banks in the bye-laws of the institution. 7. Whether Dissolution clause as per model bye-law of KVIC is : included in the bye-laws of the institution. 8. Passed for Issuance of New Khadi Certificate Director (CCC) Director (LA) Chairman (CCC) Yes / No. Yes / No. Yes / No. Yes / No. Yes / No.

Yes / No.

Yes / No.

PART IV
III. FINANCIAL ASPECT FOR ENLISTMENT 1. Submission of Statement of Accounts of the institution / Society : in original duly Certified by Statutory Auditors and counter signed by the Secretary of the institution. 2. Submission of latest audited Statement of Accounts duly certified : by Chartered Accountant / Statutory Auditors, in case of the institution implementing other than KVI Programmes or aided by the State KVI Board. 3. Whether declaration is given by office bearers that no funds have : been taken from other agencies. If yes, please furnish details thereof. Passed for issuance of Registration / Direct Enlistment Dealing Officer Zonal Office Asst. Director/ Accounts Officer Zonal Office Zonal Dy. C.E.O. KVIC Yes / No. Yes / No.

Yes / No.

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