India Modernizes Khadi and Village Industries Act to Boost Rural Economy
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India's government has cleared major amendments to the Khadi and Village Industries Commission (KVIC) Act of 1956, a move set to reshape the nation's rural economic landscape. Announced by the Ministry of Micro, Small and Medium Enterprises (MSME) on Tuesday, the update aims to modernize governance, expand the definition of 'rural area', and significantly boost investment limits for rural enterprises. The changes are crucial for enhancing the competitiveness of the Khadi and Village Industries (KVI) sector, which saw sales of Rs 1.87 lakh crore in 2025-26 and supported over 2.04 crore jobs. By aligning the rural area definition with the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission Gramin (VB-G Ram G Act, 2025), and raising investment ceilings for artisans to match micro-enterprise thresholds, the government is creating a more inclusive and dynamic environment. Institutional reforms also promise broader representation on the KVIC, including more women and historically marginalized communities, along with increased focus on branding, exports, and digitalization. With these modernized provisions, the MSME Ministry plans nationwide awareness programs through KVIC field offices and State Khadi and Village Industries Boards (KVIBs) to ensure smooth implementation. The expectation is a stronger Khadi and village industries ecosystem, offering improved access to finance, technology, and markets, fostering rural entrepreneurship, and generating more sustainable employment opportunities across all states and Union Territories.