How Khadi Is Being Reinvented

It was during a chance meeting with the prime minister in December 2015 that we discussed how the Khadi & Village Industries Commission (KVIC) could transform rural India and contribute to boosting the rural economy and creating both entrepreneurs and jobs. Soon after, my meeting with the KVIC team was fixed. I shared my thoughts on transforming the KVIC, which included suggestions like introducing designer wear, franchising Khadi stores, starting shop-in-shops, increasing the bouquet of offerings like organic products and opening stores at airports and train stations to create jobs and reposition Khadi.

After the meeting, I forgot about the discussion, only to be asked by the Prime Minister’s Office in February 2016 for a brief report on it. The Ministry of Micro, Small and Medium Enterprises had by then sent me an official letter that said the suggestions were well-taken and transmitted to outlets for implementation. In December 2016, I received a call asking to be appointed as a member of the Commission. Then came the moment of truth. Khadi was undergoing a churn due to the push from Prime Minister Narendra Modi, and the KVIC was living (as it continues to live) on the support it has directly received from the Prime Minister himself (calling on people to use Khadi, which has boosted the sales significantly).

We have tied up with a leading brand to sell Khadi wear and even opened our stores at a few airports, re-branded stores to ‘Khadi Lounge’, started designer Khadi wear, got the Khadi Ambassador/Khadi Mitra scheme going (“Earn while you learn” scheme), started a ‘National Khadi Week’, and began franchising Khadi stores.

Realising that despite the changes the sales staff needed a direct financial incentive to become customer-centric, on 2 October, we introduced an incentive scheme for the staff. These efforts are showing results, but we still have a long way to go to realise the vision of the Prime Minister. We have started getting orders which were unforeseen in the past, yet we have an internal issue of catering to such supplies.

Khadi is in need of next-level structural reforms. In the last quarter, an exercise has been initiated – of creating a plan for the vision of the KVIC. We will have to restructure the senior management by re-orienting the roles. The idea is to transform the roles from ‘administration’ of ‘geographies’, i.e., zones/regions (like regional/zonal directors/deputy CEO) to ‘management of product categories’ as ‘category heads’, i.e., director/deputy CEO of product categories like ready-made (men’s/women’s/kids wear) clothes, Khadi fabrics, hair care, skin care, food, organic products and other consumables. This will shift the focus from ‘administration’ to ‘sales’, and also the thrust will be to create profit for the rural weavers and artisans and expanding their base so that we could cater to the ever-increasing demand for our products. This calls for an overhaul of the KVIC institution in the next year or so. Luckily, the ministers in succession have been keenly following up and supporting drastic changes, but the organisation down the line still needs a ‘push’ and ‘shock therapy’ to wake up.

Under six decades of Congress misrule, the KVIC had become the ‘parking lot’. But this is gradually changing. In my first two months, I realised that we spent more time on handling vigilance/corruption cases at the monthly Commission meetings and barely found time for any progressive agenda to grow the Khadi institutions. I had to bring up at the Commission meeting that we need to spend more time on issues related to the growth and adoption of Khadi. The delays and inaction from the bureaucracy were so blatant that one chief executive officer had the audacity to change the minutes of the meeting when she was admonished for holding an important file for three weeks. Luckily, it was a coincidence that she had to move out of the KVIC immediately.

Then, we have taken transformative steps for administrative reforms in line with the Prime Minister’s vision for ‘good governance’ and ‘ease of doing business’. For instance:

a) No vendor should come to the office for payment, and all payments to be cleared within 45 days of sale of the products. If the payment is not cleared, the approving authority pays 5 per cent interest from their pocket. This will curb the corruption on making money from the vendors.

b) File movement is limited to three levels, and each level needs to take action within seven days (unless requiring SFC/Commission approval). This is meant to cut the delays.

c) The Commission officials have been advised to use ‘common sense’ more than ‘committees’. The KVIC was known for committees that caused inordinate delays. This change provides the senior officials with the authority to act swiftly and independently; also, the Commission can fix individual accountability for incorrect decisions and delays.

d) Another important change has been to cut down the external influence on decisions. If any employee is reported to be using external pressure for transfer, posting, and leniency, then the same is to be reported to the CEO/CVO and strict action is to be taken. This has cut down the political influence and canvassing so that the Commission can take harsh decisions without any pressure.

All of this has been possible due to the presence of upright members on the board appointed by the Modi government. But the biggest challenge lies ahead in getting these decisions implemented swiftly. Khadi has a long way to go to become a household brand. If we are able to push these reforms in totality, we can become the Walmart of India, the largest creator of jobs in rural India after agriculture, uplift the rural economy, and create a brand worth a lakh crore in the next five years.