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Gadkari approves scheme to make India self reliant in agarbatti production

KVIC will provide automatic agarbatti making machines and powder mixing machines to artisans through successful private agarbatti manufacturers who will sign agreements as business partners.

PTI | New Delhi | Updated: 02-08-2020 20:42 IST | Created: 02-08-2020 20:32 IST
Gadkari approves scheme to make India self reliant in agarbatti production
Representative image Image Credit: ANI

Union Minister Nitin Gadkari has approved an employment generation programme proposed by Khadi and Village Industries Commission to make India self reliant in agarbatti production through the use of locally-made machines by manufacturers and trained workers. The 'Khadi Agarbatti Aatmanirbhar Mission' aims at creating employment for the unemployed and migrant workers in different parts of the country, handholding artisans and supporting the local agarbatti industry. The current consumption of agarbatti in the country is approximately 1,490 MT per day. However, per day production of agarbatti in India is just 760 MT. The deficit is met through imports primarily from China and Vietnam. Elaborating on the scheme, which will initially be launched on a pilot basis, KVIC Chairman Vinai Kumar Saxena told PTI that "100 per cent of the machines used in production of agarbattis were being imported from Vietnam". Under the scheme, KVIC has decided to procure only locally-made machines by Indian manufacturers which also aims at encouraging local production. KVIC will provide automatic agarbatti making machines and powder mixing machines to artisans through successful private agarbatti manufacturers who will sign agreements as business partners. The Commission will provide 25 per cent subsidy on the cost of the machines and recover the remaining 75 per cent of the cost from the artisans in easy instalments every month. The business partner will provide raw material to artisans for making agarbatti and pay them wages on job work basis. Saxena said the pilot project for the programme will begin this month. "Supply of raw material to the artisans, logistics, quality control and marketing of the final product will be the sole responsibility of the business partner. After recovery of the 75 per cent cost, the ownership of the machines will automatically be transferred to the artisans," the Micro, Small and Medium Enterprises (MSME) Ministry stated.

A two-party agreement to this effect will be signed between KVIC and the private agarbatti manufacturer for successful running of the project on PPP Mode. The cost of artisans' training will be shared between KVIC and the private business partner wherein the Commission will bear 75 per cent of the cost while 25 per cent will be paid by the business partner.

"Each automatic agarbatti making machine makes approximately 80 kg agarbatti per day which will provide direct employment to four persons. One powder mixing machine, to be given on a set on five agarbatti making machines, will provide employment to two persons," the MSME Ministry said. The wages to artisans will be provided by business partners on weekly basis directly in their accounts through direct benefit transfer only.

The current job work rate for agarbatti making is Rs 15 per kg. At this rate, four artisans working on one automatic agarbatti machine will earn minimum Rs 1,200 per day by making 80 kg of agarbatti. Hence every artisan will earn at least Rs 300 per day. Similarly, on powder mixing machine, each artisan will get a fixed amount of Rs 250 per day. "The proposal was submitted to the Ministry of MSME for approval last month. The pilot project will be launched soon and on full-fledged implementation of the project, thousands of jobs will be created in the agarbatti industry," the MSME Ministry said. The Centre earlier took two major decisions by placing the agarbatti item from "free" trade to 'restricted' trade in the import policy and enhancing the import duty from 10 per cent to 25 per cent on 'round bamboo sticks' used for manufacturing of agarbatti for the benefit of the domestic industry.

Saxena said the two decisions of the central government created a huge employment opportunity in the agarbatti industry. In August last year, the government imposed restrictions on imports of agarbatti and other similar products amidst report of significant increase in inbound shipments from countries like China and Vietnam. Imports of agarbatti and other odoriferous preparations stood at USD 17.75 million during April-June 2019-20. It was USD 83.58 million in 2018-19 as against USD 84.95 million in the previous fiscal.

Agarbatti imports from China dipped to USD 6.39 million in 2018-19 from USD 8.53 million in the previous fiscal.



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