See the points raised in the Board meeting of National Khadi & Village Industries board on 6th April , 2018. I requested that we need ;
- White paper be made on ‘all aspects’ of institutional supplies done e.g. ONGC , Railways , Postal department etc.
- We must move to ‘asset light models’ like franchisees rather than setting up investment intensive Khadi Plazas
- Productivity of Charkha and looms needs to be focused rather than buying them more and more
- Out of a total of 455854 artisans only 193598 are having Aadhar linked bank accounts
There are complaints of ghost artisans in the system and this needs immediate attention
- No schemes are there to add more artisans ( as per the note sent by KVIC dated 28. 02.2018), and so , the growth plans presented are unrealistic and would fail and this has been raised recently by Tamil Nadu Sarvodaya Sangh as well four days back – 2nd April , 2018
- Meeting in Ahmedabad in January 2018 brought up the issue of the serious shortage of raw material , and this has to be addressed for ensuring that growth is achieved. Else, it will lead to ‘Fake Khadi’ products being sold .
- As per the data made available on 22 Feb, 2018, Bhopal DSO was showing a profit of Rs.3.88 lac in 2014-15 and the loss was Rs.88000.00 in 2015-16, and now shows a marginal profit of Rs. 5000.00 . Goa has increased losses from 5.84 lac in 2014-15 to 11.03 lac in 2015-16 and Rs.12.23 lac in 2016-17 . When it is a major tourist destination and should have had the best profit margins in the country . This shows that about 30 % of the DSOs ( Khadi Bhawan’s , which are under the direct control of KVIC ) are almost in loss . This was raised by me in the letter dated 02nd April , 2017 point no 39 were specific to the issue of Bhopal and Goa.
- We need a Governance and Compliance audit from either of the big four firms on the terms of reference defined by the Commission
You can open the document in the weblink below 🙂
Read the RTI document first ;
A & B ) Points to note, that 42.46 % of the artisans of KVIC are not Aadhaar Linked . Despite court orders and the orders for making cashless payments to Artisans , KVIC continued to make cash payments
Also, in absence of the Aadhar linked bank accounts , we don’t know how many artisans are genuine and how many are Ghost artisans ? I tweeted the same to the PMO on 25th September , 2017
Now , most of the people know why i am feared and avoided at KVIC by the corrupt and the inefficient. As a sitting member of the Commission , i took the hard decision to tweet the PM / PMO . How many can do it in Modi Government !!!
C) When in January 2018 Commission meeting i asked the Chairman / Commission ; do we have the record of how many artisans died in the past three years . There were blank faces all around and i was told, we don’t know how many people have died in the past three years . My next question was ; then how are we making payments ( including cash payments ) and to whom ? Now , people should know why a false complaint was filed against me ?
D) Lastly , KVIC has been making tall claims of creating lakhs of jobs , but this RTI shows that neither lakhs of jobs were created nor there were any plans till Feb 28th, 2018 to add more artisans, but plans were under formulation . This is precisely the reason that i am not being sent any minutes or invited for meetings post Feb, 2018. I am not going to accept fudged data or false statements, and lastly , i don’t get bullied with name dropping from people. I hope, i have put the facts with proof.
From: “Prof. Rajendra Pratap Gupta ” <emailrajendra>
Subject: Purchase of 3 expensive flats by KVIC for Rs. 23 crores
Date: 8 March 2018 at 8:43:41 AM IST
To: chairman kvic , commission cell , arunk3042 >, narayan.borkataky”`g. chandramouli`, vikasbharti1983 drsangeeta.manihina bhat <>, “`dr.sheila rai`” , cvo@kvic. ceo cell mumbai , chief executive officer , usha suresh >, ushasuresh ushasuresh , b h anil kumar Joint Secretary>, “`d. p. s. negi msme`”`satya narain shukla dy ceo kvic` >, “Rajendra P. Gupta”
When I had read the agenda papers for the Commission meeting held on 6th March at Mumbai , one of the agenda items was, purchase of expensive three flats at Commonwealth Games Village for RS.23 crores by KVIC and the need for the purchase was not justified.
I have the following submissions for the commission :
1. KVIC is not into the business of real estate
2. Our head quarters and flats for employees are already in Mumbai and hence I see no reason for this proposal to buy flats at Delhi
3. Public / tax payers money has to be used rationally and for the purpose defined in KVIC act . We must therefore invest in rural areas and for promotion of Khadi and Village industries and not invest for purchasing expensive flats
4. If we are in desperate need of three flats . We could rent them and that works out much cheaper
5. This money be spent for rural artisans / training’s / R& D and other important activities that help in increasing the income of artisans
6. I am given to understand that this proposal was approved in the commission meeting. Since I was not present , I must submit my views . The Commission should reconsider the decision .
Rajendra Pratap Gupta
Member , KVIC
From: ram narayan
Subject: Re: SFC meetings
Date: 2 June 2017 at 12:53:04 PM IST
To: Rajendra Pratap Gupta
Reply-To: ram narayan
The directives/instructions as given by your kind-self vide e-mail dtd. 01.06.2017 has been noted and would be complied with accordingly in future.
the Action Plan of the Marketing is being sent to you separately for your kind guidance and direction. The same is proposed to be place before the SFC in the ensuing meeting to be held on 8th June, 2017 at Mumbai after your kind approval.
Asstt. Director Incharge (Marketing)
On Thursday, 1 June 2017 2:11 PM, Rajendra Pratap Gupta < > wrote:
The Concerned officials of KVIC :
1.Please make note that henceforth , before the agenda is placed before the commission , the i/c of the department / project should make a 10 minute presentation
2. SFC agenda should never be placed before the Commission without providing for adequate time for discussion
3. Any agenda with regards to marketing should be brought to my notice ( with all the relevant details ) before presentation to the Commission
In hope of compliance
Rajendra Pratap Gupta
(Comments of Rajendra Pratap Gupta , Expert Member (Mktg) , KVIC on the proposed Khadi D’vidend project )
01st, Feb, 2018
Hon’ble Members, KVIC, CEO, F.A. & Deputy CEOs.
PS to Hon’ble Union Minister (I/C), Ministry of MSME, Govt. of India
Secretary, Ministry of MSME
FA – MSME
This is with regards to the document, ‘Khadi D’vidend’, handed over to us before lunch, during the Commission meeting on 23rd January, 2018. With no time left to discuss, we were asked to share our inputs, and a one day separate session was promised to discuss this project.
I have gone through the document, and I wish to submit the following comments for the consideration of the Commission. I seek your pardon in advance, for any inadvertent remarks:
Document flow / structure:
- Credits Section, Page 4: Inspiration has to be Mahatma Gandhi and Hon’ble PM Modi ji. It was Gandhi Ji’s vision for Gram Swaraj which had a Khadi component in it and it is the vision & support of the Hon’ble PM that Khadi has grown so much . I am surprised, that the reference to the founder of this movement and the Hon’ble PM is missing in the start, and the reference to Mahatma Gandhi is totally missing from this document itself. The highest official who vetted this document must resign on moral grounds or should be sacked for not mentioning the name of Mahatma Gandhi & the Hon’ble PM in this document’s introduction.
- Vision and Development be owed to the Hon’ble Minister, Shri Giriraj Ji, who has been tirelessly working and supporting the entire work of the Commission. The document talks about the vision of the Hon’ble Minister on page 13 & 19, but does not give credit to the Hon’ble Minister for the vision. It is a shameful act, people should refrain from stealing someone’s ideas and presenting it as theirs!!!
- Administrative and Financial diligence be owned up by the Chairman and his team who are responsible for making this document and doing the due diligence
- Page 13 refers to the discussions with experts and due diligence, but a cursory glance at the first few pages gives an impression of an inexperienced (on how KVIs operate) consultant who worked on this project and who does not even think appropriate to refer to Mahatma Gandhi, the founder of this movement!! Looks like, s/he does not know the history of KVIC. Please make a detailed presentation of the people / experts consulted and the inputs received from each of them.
- The intent of this ‘Khadi D’VIDEND’ document is similar to ‘Khadi Focus’ & the ‘Vision 2022’ documents, and hence, one has to carefully look at the direction we are taking. Another project in a few weeks after ‘Khadi Focus’ and ‘Khadi Vision 2022’, makes me a little concerned. Firstly, we need to see the outcome of the phase -1 of ‘Khadi Focus’ and ‘Khadi Vision 2022’ documents.
6. I see that, wherever there is a financial involvement (money to be spent), there is always a rush to breeze past the Commission and start buying Charkha’s or looms . SFC meetings need to be given more time and taken more seriously.
To the best of my knowledge, charkha / loom distribution is one thing and utilization is another, and this point was raised by myself in the Commission meeting held at Ahmedabad on 23rd January.
We must see: a) How much capex has been spent on buying equipment in the past year, and what is the productivity gain per man hour or man day and more importantly, the income of the artisan. Please refer my note on the document ‘Khadi Focus’. The very basis of the Khadi Focus was wrong. It lacked basics and according to ‘Khadi Focus’, the income of the artisans would reduce by about 17 % despite a five- fold increase in Khadi turnover. With such faulty planning, why are we coming out again and again with some program or the other. Such activities (launching one program after another to make news!) will tarnish the image of the Government, which aspires to do real work. These half-baked programs to self-promote do no good to anyone and one day, will embarrass the PMO, when they learn the ground reality behind such moves. Actually, there should be one long term plan and that’s it, and its outcome must be closely monitored for its impact on a bi-monthly basis; which includes, Khadi, Village Industries, Bee Mission.
Viability issue: Profits
- There are many existing Khadi Institutions (KIs) that are gasping for breath and our first priority should be to revive the ones that can be revived and then, any new investment should happen for greenfield projects. Off and on, we get negative publicity in newspapers for the ‘dead’ or the ‘abandoned’ KIs. We must first survey the ‘weak’ KIs in the 115 districts and revive them. Surprisingly, this project calls for an end to the subsidy for Khadi and KIs (page 5). Without having any ‘risk mitigation’ strategy, this will put an end to the Khadi era in the next 5 years
- Also, during the last commission meeting, I have raised the issue of how many KVIC artisans have died in the past two years and no one has a record!! Then how genuine is our payment to artisans. And now, as per this plan, we are going to add more 80,000 charkha’s & 16000 Looms, empaneling new artisans? Are we building on a payment / MDA scam? Why are the artisans not Aadhar linked? Let us geo-tag all the Charkhas and Looms and Aadhar link all artisans.
- Also, during the last commission meeting, I have raised the issue of profitability of khadi institutions. This document mentions about 2000 KIs on page 10, and also talks about ‘Unwavering motivation to develop sustainable self-reliance among rural communities’. But there is no report available on how many of the 2000 KIs are making profits. My other commission members regularly post pictures of defunct KIs and not much is being done to help them revive.The first program should be to revive them and make them self-sustainable and then, make them earn decent profits
- Page 11. Please provide the a) institution wise b) product category wise and c) district –wise break-up of Rs.51,997 crore turnover mentioned here and what is the profit ?
- What is the basis of the claim that KVIC – the patron, and ‘original’ promotor, will recover 25% of the net margin generated. If the Charkha and looms are so profitable a proposition, we must discuss why our KIs are cribbing for lack of profits in this business.
- Page 27 states that the government will recover the investment costs @ 25% of the annual net income from the project, BUT, on page 24 it is stated, that the net profit will be 20 % on the figures quoted. I also understand that the 20 % net profit will mean that people will have expenses to take care of, and loans to repay? I somehow feel a need for a complete actual model rollout to believe these numbers- we need a test pilot for this program.
- Data sets are confusing. A simple calculation of investment by mother institutions to the tune of Rs. 1.63 Crore for working capital (page 15) and capex of Rs.48 lac (40 looms @ Rs.45000 = Rs. 18 Lac & 200 Charkhas @ Rs.15000= Rs. 30 Lac) per village (and this does not include training and other associated costs), creates an employment for 250 persons (page 20), which means an investment of Rs. 84,400 per person (refer the document, page 15); whereas, the scenario quoted on page 25 is quite different. It quotes, per capita investment of Rs. 21,001.78 can yield a return of Rs. 7,320.00. Either I have got some numbers wrong or something is amiss
Plan and business Model
- The web of partnerships mentioned on page 14-15 makes me believe that some consultant has prepared this document without the basic understanding of how KVIs function, which markets they operate , and the legalities involved in making these web of partnerships work!!!
- Khadi Gaon Sansthan would be a legal entity? Please explain the structure.
- The document mentions on page 15 that, “400 villages from across the country will be selected though a participatory process involving different agencies and your letter no D.O. NO.CS/01-III/2018 dated 29th January, 2018 mentions it as a ‘Prestigious Project’, and requests the Commission members to identify the villages. These are quite confusing. Was the rural development member, Padamshree Ashok Bhagat ji involved in drafting the D’VIDEND document ?
- Please explain the need of KIP (Khadi Institutional Partner) and what is the financial and administrative relationship, refer Page 15.
- What is the criteria used to identify the KIs under KRDP. “Please detail out the ‘Set of criteria” as mentioned on page 15.
19. What do you mean by ‘Actual’ Khadi Business Partner (KBP), and why is this needed when there is a KIP? Please refer page 16 and point above on KIP. Also, as per page 27, KBP will have the responsibility of raising the working capital of Rs.1.63 crore. What is the basis? Any discussion with the potential KBP be shared with the Commission.
20. Organogram on page 28 is about Patronage and governance which rests with the Commission. KIP takes care of Administrative management, KBP takes care of Business Management and KGVS takes care of Production Management!!! Now, with over two decades of my board experience and running corporates, I am at a loss to understand why we need different entities for a) Governance b) Administrative Management c) Business Management d) Production Management? Looks like someone who made the document never ran a company as a CEO / MD / Chairman!!
- Execution (page 17) is an unrealistic scenario and ridden with complexities and I am little puzzled with the terminology as well like; ‘ Execution Agreement’ & ‘Enterprise Agreement’. I am sure we will need training on both these
- Of the total 6,38,596 villages, we have chosen 400 villages for this new model. What is the basis of 400 villages. Please detail out how you would identify the ‘Economically backward villages”, as mentioned on page 14 (what is the objective criteria)?
- Description on page 18 makes it very complex when the document talks about participation of Ministries, KIs, corporate entities, State Governments, and district administration. If we relate the mention of KIP (page 19) liaise with various ministries, state governments and district administration to initiate making sufficient provisions for the amenities in villages; such as the approach road, electricity, water, sanitation etc., all leading to a Khadi Gaon, and needs to be done till August 2018, then the project is quite un-realistic in its assumptions, and doesn’t take into consideration the inter-ministerial issues.
- Timelines are unrealistic and we can see from page 29, all deadlines mentioned for January are missed, so this project appears to be a ‘paper based concept’ that is not realistic and needs going back to the drawing board, and working with people with reasonable understanding of retail and Indian market.
- Page 29 mentions that bank will give working capital. What is the collateral? Which bank is giving Opex? What is the rate? Will it affect the 20 % profit margin? All these are unanswered from a hypothetical model quoted in this Khadi D’VIDEND
- The mention of the employment statistics on page 20 will hold good as long as the end product is profitable enough for people to meet their daily needs. What is the different thing in this model which is not there in the KIs model for the artisans to make profit. I am always wary of the numbers thrown, as these don’t stand the test, like the numbers in Khadi FOCUS document didn’t add up at all!
- Page 25 mentions spinners rate @ Rs.7.5 per hand. Does this need any approval, as when the Commission increased the rate in the Sabarmati meeting, it was not approved by the Ministry
- Page 13 of the document says that the 31 % of the rural artisans are women, but the note No: DK(KPM)/Five year plan/ Gen/2017-18 dated 08-01-2018 says, ‘most of the rural artisans are women’. The facts and figures have to be double-checked before being presented to the Commission
- W.R.T. the ‘Organizational Wealth’ of training institutes as mentioned on page 21, Dr. Sheila Rai’s inputs would be important. Though I have my own doubts on training 2000 people and the costs involved-given the timelines, but I will let the expert member (Training) comment
- Page 23 mentions production of 512 lakh meters fabric annually. But do we know how much fabric is produced by the existing 2000 KIs? Please make a presentation on the same. Also, during the last Commission meeting, the director (Mr. Khandelwal) looking after Raw Materials, had indicated that we have a crisis of procuring raw material for the existing production needs. How come we serve the demand of raw materials for the additional 80,000 charkha’s and 16000 looms? Has this challenge been factored?
- Page 38 does not give any assumptions and the basis for the numbers like 60 % will be converted into premier shirting, 40 % will be converted into ladies salwar, chudidars etc. ?
- Page 42 mentions about zonal distribution. What about the North East? We have seen the issues raised by the Commission member from NE about the shortage of staff. Despite this, all such paper projections have been made without a plan? West with a much larger population has projected only 45 ‘Khadi Goans’ and N.E. has 38? We know that the west is amongst the worst performing region as per the presentation made in the last commission meeting. This is not justifiable
- Page number 26 talks of three definitive phases i.e.; establishment, development and sustainability. This is a confusing statement. Need a detailed presentation on this.
- There is no data to support how much a typical village earns and how it spends and what are its needs? Given all these facts, this project, in my view is just a photo-op and a press-release. If some elements of this project are to be taken, they must be backed by a test pilot and then a scaled up pilot, iterations included in the phase II and then, a full blown roll out. Taxpayers money cannot be blown away on the whims and fancies of few, based on a concept paper with no experience of ground reality
I would suggest that you have a look at the way the marketing department has initiated the projects. There is a lot to learn on how there was an overall vision, backed by a rationale and a thinking and then, we took up some key initiatives.
This plan is devoid of any field work or realistic experience and is too bookish in context and over-complicated with no clear plan, and over-complicated structure.
Since this program is about villages, inputs should have been taken from Mr. Ashok Bhagat and other members who are working in the villages
My genuine concerns are around the following, and am sure the team will clear them in the meeting and make this project simpler, financially sound and fool-proof in implementation:
B. Planning and business model C. Timelines
D. Viability & Scale
In fact, this program should have been started in the first 3 months of re-constituting the commission and not at the fag-end, given the timelines. It will only lead to buying of equipment, spending and thereafter, it will be tough to find any business continuity and outcome.
Lastly, on page 30 in the conclusion, the document says, “Khadi D’VIDEND’ is also an integral part of the Khadi Vision 2022’. If so is the case, why this has been presented as a separate program with a vision etc.? This confounds the confusion. This ideally should be subsumed into Vision 2022, and not as a separate program.
My suggestions on the way forward:
- Under Vision 2022; segregate-zone-wise, and pick up 2022 villages across 115 backward districts identified by NITI Aayog
- Scan them for existing KIs which are ‘Weak’ or ‘Dysfunctional’
- Adopt a ‘Zonal Level- Cluster Approach’ for leverage and logistics. Also, this can help in various other functions like group-sourcing, marketing and logistics
- Prepare a revival plan with Solar Charkha’s & Looms with forward linkages
- Such KIs should be allocated 25 % of the KVIC ‘exhibitions’ (subject to their willingness to participate), so that they can sell and promote their products
- Their quota for government supplies be mapped, and accordingly incentivized to supply the government contracts and have a consistent source of income
Please refer the note No: DK(KPM)/Five year plan/ Gen/2017-18 dated 08-01-2018 that states that Khadi is facing stiff competition from other sectors of textile industry and its market share (production) has been 0.5 % of the overall textile market in the country. This issue needs to be discussed as an overall strategy of Vision 2022.
Further, in the same note, the break-up of the 2011 KIs is given which states that;
- 4 have a turnover of more than 15 crore (0.19 %)
- 6 have turnover between 10-15 crore (0.29 %)
- 27 have turnover between 5-10 crore (1.34 %)
- 1662 (82.64 %) have a turnover of less than a crore.We have to turnaround these KIs and take them to the new level. Answers don’t lie in sitting in Bombay or Delhi offices, but those members who are willing, are free to join me to meet KIs across the spectrum, and evolve a robust plan to turnaround these institutions which are having a turnover of less than Rs. 1 crore. We need to get them to be Rs.5 crore. Those with Rs.15 crore turnover need to cross Rs. 50 crore. Else, someone will come with a new 3D printing technology and kill this Khadi forever. Those members who are willing to join me, please contact me. Let us do our groundwork in March-April and present the turnaround report in May–June to the Commission. Above all, we need to add more youth to the KIs movementCommission cell is requested to provide the list of all 2011 KIs with turnover, address, phone number and mobile numbers of the key officials of these KIs. This must be made available within 10 days of the receipt of the email. I believe this data is available with the HQ and must be ‘emailed’ ASAP – Mr. S.N.Shukla, please do the needful .Lastly, all documents like ‘Khadi Focus’, ‘Vision 2022’, and ‘Khadi D’VIDEND’ should be first placed before the Commission members, so that such glaring lapses can be avoided
Thanks & regards
Rajendra Pratap Gupta
Expert Member – Marketing, KVIC , &
Member , National Khadi & Village Industries Board
- P.N: I am out of country till 6th Feb, but available on email / phone
October 15, 2017
Khadi Focus Plan
Commission Cell – KVIC:
I have reviewed the document ‘Project Khadi Focus’, and i have the following observations , concerns & suggestions .
- This is a supply-based document and does not discuss or factor “a consumption oriented” plan OR/ & efforts for “demand creation” or ‘New product lines’. All throughout the document, i searched for the consumption pattern and consumption trends over the past 2 -3 years and future projections, but I could not find the same . Such plans without any basis are bound to falter. A retail organization is based on the needs of the consumers and market dynamics, this document falls short on addressing the core issue of ‘consumption need gaps’ , ‘demand creation’ and ‘Competition analysis’. This should have been the starting point . So it is a manufacturing plan without a sales plan, which makes it incomplete
- This document makes no references to the ‘total apparel or fabric market’ and the ‘trends in apparel industry’ or refer to any forecasts about the annual growth in the industry/ segment. I expected that a plan to boost sales should ideally have been based on a market research or study conducted by KVIC to arrive at the details. Whereas , some good reports are freely available in India and should have been referenced for this document , there is no such mention.
- I did not find any mention, leave alone any convincing plan for addressing middle class family’s needs , youth and college going segment of the population; which will be a big contributor the boosting sales . Demographic segmentation is totally missing from this document , which is crucial for the consumption and growth of Khadi
- SWOT ( Strengths, Weakness , Opportunity & Threats) analysis is missing for Khadi, and this makes this document totally relying on the support from the Hon’ble PM’s messages, and it is at best, a ‘wishful thinking’, lacking any planning rigour needed for massive organic growth
- The serious lapses mentioned above makes this document questionable from the planning point of view. More so, since this document is based on the meeting on 23 August 2016 at the PMO, and this Khadi Focus was presented briefly to the commission in the form of a short power point presentation only on 26th September 2017. Prime facie, it looks like that more than a year has gone into preparation of a document, which falls short on fundamentals of a business plan
- Management summary (in common parlance is referred as Executive Summary) is way too long, and this makes it repetitive in the management summary & the main plan document. Ideally, this should have been 2 pages at max.
- Page 2 para 3 & again on page 12 para 1 it has a typo. It must be ‘ Editions’ and not ‘Additions’ of ‘Mann Ki Baat’.
- I did not find a plan to connect rural artisans to national / global markets / consumers which is the key in today’s connected ( online sales driven) world. Ideally, it should have mentioned our SWOT analysis of the tie up with Paytm etc. and our future course of action.
- This document is weak on addressing profitability of artisans , logistics , visibility of Khadi , Quality of products and with no basis on the number of artisans needed to provide ‘gainful employment’ .
- The numbers mentioned on page 4 don’t add up. With KIs turnover of 1065 crore handled by 3.2 lakh artisans , the revenue per artisan comes to Rs. 33,281.25 Moreover, this is the retail turnover , which means the profits are barely anything ( may be Rs.6000 per artisan annually @ 20 % margin at the producer level). Even the data on the same page , of 2313 institutions Which will make it like the crisis of existence for people involved in KVI unless we address the fundamental issue of sustainability of KIs
- The paradigm shift mentioned on page 5 reads “Communities that works, the infrastructure that produces, and the markets that absorb the production’, but this is incomplete and ideally should have read “Artisan finds a gainful employment, robust infrastructure that produces quality products , and the markets that absorb the production, thereby leading to sustainable consumption and growth for Khadi’. Please remember , if the earnings of the artisans are not enough, we will have failed to address the sustainable growth model for KIs. Profit of rural artisans lies at the heart of this success story
- Page 6 para 2: If you add 15 lakh people with additional looms to work whole time and considering the existing 3.2 lakh artisans , the Rs. 5000 crore turnover for KIs would mean that retail value of Rs. 27472.00 for each artisan ( this is the retail turnover and the earning per artisan will be in the range of Rs.5500 per year). This cannot be attractive to any worker in today’s time, and will kill the artisans and their families. Right now, farmers commit suicides , after some time, Khadi artisans will start committing suicides with such faulty planning .
- Please refer your point on ‘Focus Strategy to increase Production on page 7. The document mentions main strategy is to increase Khadi Production. I think , this is wrongly placed and this validates the challenge I mentioned in point 1 . This document has failed to do the SWOT analysis and hence such a misplaced priority !!! Please address the issue I have raised in point 11 above before thinking of adding 15 lakh more artisans ( page 6) or adding more units ( page 7). Whereas , it is important to add more artisans and provide employment , but It cannot be done without have adequate ‘consumption markets’ and ‘gainful employment’ for people involved.
- You need a transition plan for transformation and which is completely missing in this document . The numbers don’t add up
- Page 6 gives an note on strategic focus and mentions four points . But what it mentions as strategies are in fact goals . I didn’t find the pathways leading to attain the goals like; how will you increase production , ensure national participation, develop community skill or invigorate market ( refer organogram on page 6).
- Khadi Plaza as a policy must be reviewed given the financial pressures and the cost of setting the Khadi Plaza as discussed in the commission stands at Rs.6-10 crore. We need to rationally allocate resources. I am given to understand that Jaipur Plaza is a massive waste of resources due to wrong decisions. We cannot squander the government funds meant to create employment and income for the poor and the rural artisans. Khadi Plaza must come out after proper market assessment ( refer my inputs on franchise document sent to myself early 2017) . Also, the commission must deliberate this issue of setting up Khadi Plaza’s after assessing the contributions of the existing Khadi Plaza’s. We must focus on asset light models, where the future growth should come through franchises and MBOs ( Multi-brand outlets ) and SIS ( shop-in-shops) retail models
- Page 8 para on PPPs: I am not sure if partnering with private companies to co-produce Khadi products will help us in the long run. May be , we will remain just a supplier of fabric and these companies will takeover the market of readymade Khadi products. I recall in my meeting dated 8th June of the SFC, wherein , I made a specific request to the S&T Director ; ‘please pick up the Khadi products made by Raymonds and find how we can reach that level of quality inhouse’. The strength lies in competing with them and not allowing them to kill our retail products. As a member of the Commission , I firmly believe, that by relying too much on such tie ups , we are going to kill our retail customers and lose them to private brands and also, one day, these companies will find a way to circumvent our procurement, product differentiation and deal directly with the artisans thereby making KVIC organization irrelevant over the next few years. Our goal should be innovations from end to end ( weaving to retailing) and managing the entire value chain within the exclusive realm of KVIC.
- Page 9 , para 1 : I am not convinced that MDAs will be sufficient / right mode to pay for the Rs.2011 crores with interest in five years ( page 20 last para). Please present the data on MDAs for the past two years.
- Page 11. Data on 35 % population living in remote corner of the country is without a basis . If this document is referring to the rural population , the data is wrong , it is around 67 percent and not 35 %. Also, there is no definition of remote corner in this document.
- Data presented in the Khadi Focus is inconsistent and confusing. On page 4, last para it mentions 137.49 lakh ( one crore thirty seven lakh) rural artisans employed by KVIs, and on page 11 it mentions 3.20 lakh micro-enterprises. Data sets used should be consistent and not confusing . I would like to see the basis for the data of 137.49 lakh rural artisans . Please provide the source of this data . When we are talking of Khadi Focus , we must only refer data pertaining to KIs.
- Page 18 under marketing strategy: I cannot understand the term ‘trendy’. If it’s a new design , has there been any study of apparel retail formats ?
- Page 18 under marketing strategy : the statement is contradictory and without any understanding of the production process and supply chain. If you are opening Khadi production to institutions and companies, it conveys your lack of understanding of the basic fact , that the individual artisans will not be able to compete with mass production from institutions and companies and will move out of the Khadi production. I didn’t find a justifiable reason for this misstep !! Would need to learn more about the reasoning behind . Please share the details and enlighten me
- Logistics & supply chain improvements finds no mention , whereas a three fold increase will need drastic improvements in procurement and supply chain.
The structure of Khadi Focus document could have been as follows( in my view);
- Executive Summary – 1-2 page ( TORs, goals, recommendations. Please note that Executive Summary is normally 5-10 percent of the entire document)
- A paragraph on PMs vision / meeting with PMO – Goal
- Market estimates based on various forecasts/ reports for apparel / garment / fabrics for the next 3 years- data on the market , consumption trends , income of households and their expenditure on clothing
- In house market research conducted by KVIC on consumers expectations and market assessment and needs, along with competitor analysis
- Detailed sales, supply and profit analysis of tie-ups done till date like , ONGC / Railways / MOHFW/ Paytm etc.
- Off-take from Ritu Berri collection & Benefits from Raymonds tie up
- Target for sales
- How to make Khadi weaving an attractive profession, and Khadi an attractive apparel in keeping with the needs of the consumers
- How to convert non-khadi buyers into Khadi . No reference or mention about it
- Product differentiation strategy – this is critical to ward off ‘Me too’ products.
- Measures to strengthening and re-orienting the existing institutions and artisans
- State-wise / district wise plan for priority areas for Khadi development is missing . Neither there is any analysis of state specific SWOT analysis for planning .
- Measures to improve quality totally missing from the document , which is critical to sustaining customers and growth. I would have appreciated if there was a mention of initiatives for Quality Control / Quality Assurance
- Training needs has not been touched upon in this document
- Research and development and how to make Khadi ‘low maintenance’ . As of now , people have expressed concerns about Khadi being a ‘High maintenance’ office wear.
- Also, we need new product lines and this is not finding a mention in this document
- Outreach efforts
- Logistics & supply chain improvements
- Unconventional sales channels and plans – refer my detailed plan / note dated 02nd April , 2017
- International sales
- Half- yearly / Quarterly plan on marketing & sales
- Break up of Rs.5000 crore retail sales into cost of manufacturing , cost of transportation , selling and break up of the associated cost and how we can add value in each step of the process would have given a robustness to this plan / document . Which is totally missing .
- You need a transition plan for transformation and which is completely missing in this document
The lack of relevant date sets in this document reminds me of my mail dated Dec 28, 2016 on data that I have asked for , and I can see its importance in planning
There is a need of ‘Khadi Connect’ program which includes outreach to schools and colleges , National Khadi Yatra etc.. Please refer my mail dated on Khadi Marketing Workshop early 2017
How about Khadi clusters setting up their own retail arm / channel in ‘Village Hats in every town or linking them to customers directly through the Khadi app which I have already initiated in June.
Mention of reducing drudgery is missing and occupational health is important and needs to be addressed, if we wish to engage more artisans in KIs and boost up sales
Such an important document should have been prepared in consultation with the members of KVIC and other stake holders, and after a proper study conducted by KVIC. Every member of KVIC is handpicked by the Central Government based on specific skill-sets . But this brings me back to the two pager letter sent by our Member-South Zone in September on the way KVIC is being run without taking members views into decision making. Also, surprisingly, no market study was conducted ( it has not reference in this document) to arrive at a plan for attaining Rs.5000 crore in sales and it is shocking to see a document lacking any fundamental basis of reference to any data to arrive at the plan, to achieve the sales and that too, when it has taken a year to prepare this document .
But , I am sure that Hon’ble PMs call will itself be enough to boost the sales as long as we can cater to it !!!
My best wishes for success
Rajendra Pratap Gupta
Expert Member ( Marketing)
Khadi & Village Industries Commission &
Member, National Khadi & Village Industries Board