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Government approves Khadi Agarbatti Atma Nirbhar Mission

The Khadi Agarbatti Atma Nirbhar Mission aims at handholding artisans and supporting the local Agarbatti industry.

Aug 3, 2020 09:48 IST
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The Union Government approved Khadi Agarbatti Atma Nirbhar Mission on August 2, 2020 to generate employment and make India self-reliant in agarbatti production.

Union Minister for MSME, Nitin Gadkari approved the unique employment generation scheme, which was proposed by Khadi and Village Industries Commission (KVIC) to help India become Aatmanirbhar in Agarbatti production.

The “Khadi Agarbatti Aatmanirbhar Mission” will help create employment for a large number of unemployed and migrant workers in different parts of the country. It will also substantially boost domestic Agarbatti production. The proposal was submitted for the approval of the Ministry of MSME in July.

Significance

The Khadi Agarbatti Atma Nirbhar Mission aims at handholding artisans and supporting the local Agarbatti industry. The mission is expected to create over thousands of jobs in the Agarbatti industry. It will help create sustainable employment and support private Agarbatti manufacturers to increase their Agarbatti production without any capital investment by them.

Key Highlights

The Khadi Agarbatti Atma Nirbhar Mission has been designed by the Khadi and Village Industries Commission on PPP mode. The KVIC has signed a two-party agreement with private Agarbatti manufacturers for the successful running of the project.

Under the mission, the KVIC will provide powder mixing machines and automatic Agarbatti making machines to the workers through the successful private Agarbatti manufacturers, who will sign the agreement as business partners.

The KVIC will only procure locally-made machines by Indian manufacturers with the aim of encouraging local production. The Commission will provide 25 percent subsidy on the cost of the machines and recover the remaining 75 percent of the cost from the workers in small installments every month.

The business partners will provide the artisans with the raw material for making Agarbatti and will pay them wages on job work basis. The cost of the workers' training will be shared between KVIC and the private business partner, where KVIC will bear 75% of the cost while private business partners will bear 25% of the cost.

Each of the automatic Agarbatti making machine are expected to make approximately 80 kg Agarbatti each day, which will provide direct employment to 4 persons. On the other hand, one powder mixing machine, which will be given on a set of 5 Agarbatti making machines, will provide employment to 2 people each.

The current payment rate for making an Agarbatti is Rs 15 per kg and so, 4 artisans working on one Automatic Agarbatti machine would be able to earn a minimum of Rs 1200 per day by making 80 kg of Agarbatti.

This means that every artisan will earn at least Rs 300 per day, while each artisan working on the powder mixing machine will get a fixed amount of Rs 250 per day.

The wages will be provided to the artisans by the private business partners on a weekly basis. The money will be transferred directly into their accounts through Direct Benefit Transfer. The business partner will also be responsible for the supply of raw material to the artisans, logistics, quality control and marketing of the final product. 

After recovering 75 percent cost of the machines, their ownership will automatically be transferred to the artisans.

Objective 

The Khadi Agarbatti Atma Nirbhar Mission has been launched mainly due to the import restriction imposed on raw Agarbatti and increase in import duty on Bamboo sticks. These decisions were taken by the Ministry of Commerce and Ministry of Finance respectively on the initiative of the MSME Minister Nitin Gadkari. 

Background

Currently, the consumption of Agarbatti in India stands approximately at 1490 MT per day. However, India’s per day production of Agarbatti is just 760 MT. This shows that there is a huge gap between the demand and the supply and hence, immense scope for job creation.

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