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Khadi Agarbatti Pilot Project – Gramodyog Vikas Yojana 

Khadi Agarbatti Pilot Project – Gramodyog Vikas Yojana

Ministry of Micro Small and Medium Enterprises (MSME) issued the Operational Guidelines of Khadi Agarbatti Pilot Project vide a notification dated 09/16/2020. This pilot project is approved by the Ministry for the benefit of artisans involved in the manufacturing of Agarbatti under the ‘Gramodyog Vikas Yojana. This scheme aims to enhance the production of ‘Agarbatti’ to develop the village industry in the country. As per the program, initially, four Pilot Projects will be started, and each targeted cluster of artisans will be supported with about 50 Automatic Agarbatti making machines and 10 Mixing machines. The program will act as a catalyst in reviving Agarbatti manufacturing in the villages. The present article highlights the operational guidelines of the Khadi Agarbatti Pilot Project.

Gramodyog Vikas Yojana

Gramodyog Vikas Yojana is one of the two components of Khadi Gramodyog Vikas Yojana which aims to promote and develop the village industries through common facilities, technological modernization, and training.

Setting up Pilot-projects under GVY

For promotion and demonstration of Agarbatti production activity across the country, the following supports are provided to artisans.

  • Support to artisans developing hand-rolled Agarbatti with Pedal-operated Machines
  • Support of Automatic Agarbatti machines to SHG, other similar groups as decided by the Commission

Objectives of Khadi Agarbatti Pilot Project

The objectives of the Khadi Agarbatti pilot project is to increase the local production capacity of Agarbatti to build self – sufficiency in India.

  • For creating sustainable employment by providing training and distributing the Agarbatti making machines to the artisans
  • To increase the production of Agarbatti manufactured by Khadi institutions
  • Aims to provide pedal-operated machines and to upgrade the earning capacity of artisans involved in the production of Agarbatti
  • To provide automatic Agarbatti machines to Self Help Groups or similar groups
  • To make a tie-up with the successful Agarbatti manufacturers and entrepreneur for the supply of raw materials with buy-back arrangement of final products
  • To provide training to all the selected artisans on the job skill development through trained Master trainers in FFDC
  • The scheme is planning to tie up with the professional institutes like IITs, FFDC, Kannauj, MGIRI, MSMETC, VNIT, Nagpur, Indian Institute of Packaging for technology intervention in the machines, alternate raw material, packaging, etc.

Eligibility Criteria for Khadi Agarbatti Pilot Project

  • The age limit of the applicant should be between 18 years to 55 years
  • The applicant should have Aadhaar Card, in case of non-availability of Aadhaar Card/Voters ID with photographs and Ration Cards
  • One person from one family will be eligible for pedal operated/ automatic Agarbatti machine and two persons from one family is eligible for Groups activity
  • Self Help Group (SHG) is eligible for the scheme and all members will be trained for Agarbatti making
  • Persons already trained in Agarbatti making by KVIC/ KVIB /NABARD/KVK(s) /Training Centers recognized by State or Central Government or Bank/ Eligible NGO(s), etc are eligible under the scheme
  • The artisans working with Khadi Village Industries (KVI) institutions for the production of Agarbatti will be given the preference.

Note: Persons who have availed benefits from other Government Schemes for the same/similar purpose will not be eligible; the beneficiary shall give a declaration to this effect

Prescribed Authority

The pilot projects will be implemented by KVIC or through directly aided institutions of KVIC in the States of Bihar, Uttar Pradesh, Orissa, Rajasthan, Maharashtra, Karnataka, etc.

Initially, 10 Pilot projects will be set up with a maximum of 100 beneficiaries. The project will be implemented with a maximum of Rs. 20.00 lakhs’ investment of KVIC.

Features of Khadi Agarbatti Pilot Project

The features of the Khadi Agarbatti Pilot Project is explained in detail below:

Training for Artisans / SHG

KVIC will organize the basic skill development training to the artisans / SHG and other groups involved in the Agarbatti production to increase the production level and thereby enhance their income generation. Besides, to ensure optimum utilization of the machine, the KVIC will organize training through trained professionals or CoE, to the beneficiaries.

Skill Development Program for Artisan

The eligibility criteria for the Skill Development Program and other details of the program are as follows:

The skill development programmer will be conducted for 10 days. The number of the application selected for the training is 20 and the Financial Expenditure for training is Rs. 50000 per batch. The funds for training will be released directly to the State Offices and the KVIC should conduct online training programs. The funds for Training shall be released directly to State/Divisional offices

Hand Holding

KVIC will provide the suitable Pedal-operated or Automatic Agarbatti making machines in a phased manner to trained artisans who can provide a quality output as acceptable to buyers of Finished Product.

Funding Pattern

The funding pattern under the Khadi Agarbatti Pilot Project – Gramodyog Vikas Yojana is as follows:



Estimated Cost

1 Provide 10 days of agarbatti skill up-gradation training (20 candidates per batch). On the job free of cost Training with the involvement of experienced/experts in Agarbatti industry.
2 Cost of Raw Material Rs. 10,000 for a batch consisting of 20 people.
3 Honorarium of Trainer Rs. 10,000 per batch
4 Wages for artisans Rs500/- per person Rs. 10,000/- per batch
5 Local conveyance for artisans Rs250/- per person Rs. 5,000/- per batch
6 Backward and Forward expenses Rs. 15,000/- per batch
7 Pedal-operated machine Rs.20,000/- per artisan
8 Mixing utensils to each beneficiary Rs.1000/- per artisan
9 Raw material assistance for pedal operated Agarbatti machine Rs.2,000/- per artisan
10 Raw material assistance for automatic Agarbatti machine Rs.4,000/- per artisan
11 35% Subsidy on automatic Agarbatti machine Rs.1,75,000/- per group for 5 machines.
12 35% Subsidy on automatic Mixer machine Rs.14,000/- per group for one machine.
13 Support on installation & maintenance of automatic machinery Rs.5000/- per group

Support to Artisans Developing hand-rolled Agarbatti with Pedal-operated Machines

Under the Khadi Agarbatti Pilot Project, a maximum of 500 beneficiaries will be assisted in a phased manner with a total investment up to Rs. 1.35 crore for the year 2020-2021.

Contribution by Artisans

The contribution by the artisans for the Khadi Agarbatti Pilot Project is tabulated here:

Sl.No Particulars

Beneficiaries contribution

KVIC Contribution

SC/ST/Gen BPL Migrant labour SC/ST/Gen BPL Migrant labour
1 Pedal-operated machine 10 % 0% 0% 90% 100% 100%
Automatic machine 65% 65% 65% 35% 35% 35%

Selection of Beneficiaries in the Pilot Project Area

The field offices will identify the beneficiaries by conducting the awareness camp or through advertisements as per the annual target allocated for the Scheme.

Field offices should also carryout local publicity for getting the applications from the beneficiaries through the following departments:

  • Government Departments
  • Directly aided Institutions (DAI)
  • KVIB
  • Nehru Yuva Kendra Sanghatan (NYKS)
  • SC/ST/Minority Finance & Development Corporation
  • Ministry of Women & Child Development (MWCD)
  • Army Wives’ Welfare Association (AWWA),
  • Panchayat Raj Institutions
  • State Women & Child Development Corporation
  • State Designated Authorities of Agricultural and Horticultural Departments

Preference will be provided to the entrepreneur who is trained in the related activity and profile. As per the scheme, a minimum of 50% preference will be provided to SCs/STs/Women candidates/BPL category.

The final selection of the beneficiaries will be done by a State level Committee to be constituted for the purpose.

Selection of SHG

The SHGs and leading Agarbatti manufacturer of state will be selected by the Selection Committee as detailed above

Cluster approach under SFURTI

To have a meaningful impact in the medium-term to support artisans working in the Agarbatti industry, for their sustainable employment and enhance their earnings,10 clusters may be set up on the lines of the SFURTI cluster scheme of the Ministry of MSME for Agarbatti production in the next one-two years with proper backward & forward linkages.

Please click on the official link on the General guidelines of the Khadi Agarbatti Pilot Project – Gramodyog Vikas Yojana for reference.

Application Procedure for Khadi Agarbatti Pilot Project

After the advertisement, the applicant (beneficiaries/SHGs) desirous of establishing the Pilot Projects, get training or machines need to submit the application along with the project proposal to State/Divisional Directors of  KVIC. Concerned State Office, KVIC can be contacted to know the further processing of the application.