MSME ministry considers Rebate policy revamp

NEW DELHI, MAY 16 : Under pressure from khadi production units, the MSME ministry is revisiting its policy of extending 10 per cent annual rebate to Khadi and Villages Industries Commission’s retail sales through its outlets. On recommendations of Hyderabad-based Administrative Staff College — which presented a cost chart of khadi industries — the ministry is keen on revamping the current model. It has suggested splitting rebate at production, marketing and retailing stages.

“The new scheme should be able to give fillip to production and marketing efforts,” said a senior ministry official. Currently, it is in talks with various stakeholders like KVIC and KVI units and is hopeful of reaching a consensus on proposed policy. The finalised proposal will be sent to finance ministry for approval.

“Those involved in production face a peculiar problem of shortage of working capital. Since rebate sales are concentrated around a certain time period, a lot of inventory is piled up. Thus, there are payment delays to producers,” he added.

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