Published
Mar 15, 2022
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KVIC special reserve fund shields Khadi units from price hikes

Published
Mar 15, 2022

The Khadi and Village Industries Commission is using its Products Price Adjustment Account to shield Khadi units from the rising prices of cotton to keep the industry running. 

KVIC is shielding Khadi units from rising materials prices to keep the industry afloat


“Three years down the line, when the entire textile sector is facing the brunt of short-supply and a steep hike in the price of raw cotton, KVIC has decided not to increase the cost of sliver/roving being supplied to the Khadi institutions by its sliver plants across the country despite the cotton prices surging by over 110%,” said KVIC in a statement on March 12, the Press Trust of India reported. 
 
KVIC had created the fund by transferring 50 paise to the fund from each kilogram of the total sliver/roving sold by its five Central Sliver Plants. These Central Sliver Plants purchase cotton and convert it into sliver and roving to supply to Khadi institutions, which then convert it into yarn and fabric. 

KVIC announced that it will require 6,370 cotton bales of different varieties by March 31 this year. At the current rate, this will cost Rs 13.25 crore, compared to Rs 9.2 crore as per the old rates. KVIC will use its PPA reserve to cover the Rs 4.05 crore price difference to shield the industry and enable to continue to run. 
 
“The reserve fund has ensured that Khadi institutions in the country remain unaffected by the price rise and the prices of Khadi cotton apparels also do not go up,” said KVIC in a statement. 

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