DIRECTORATE OF KHADI RAW MATERIAL

KHADI AND VILLAGE INDUSTRIES COMMISSION

3, IRLA ROAD, VILE PARLE (W), MUMBAI-56

Phone/Fax : 022-2620 7624, E-mail :

No.DKRM/CSPs/R.M.Policy/2013-14/ 20thAugust2013

STANDING ORDER No. 1722

Sub: Methodology of Cotton, Wool & Silk

procurement Policy – reg.

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The Commission in its 612th meeting held on 22.4.2013 has approved methodology of purchase of Cotton, Wool and Silk raw material. This is in supersession of all previous circulars on procurement policy of raw material.

The methodology of purchase of Cotton, Wool and Silk raw material are as follows:

FOR C.S.Ps:

The existing policy as notified vide circular No. DKRM/ CSPs/Cotton Purchase-CCI/2009-10 dated 24.12.2009 shall continue in respect of Dept. CSPs.

FOR KHADI INSITUTIONS:

  1. The institutions which works on traditional charkha have been permitted to purchase desi cotton as well as as well as other varieties which is not procured and sliver/roving of such varieties is not supplied by KVIC departmental CSPs from the open market, as per approved production target. Besides, permission also accorded to procure required varieties of cottonto those institutions who have facilities to convert cotton into sliver/roving from open market. Proof of source of purchase of raw material made shall have to be provided to State/Divisional Director or his representatives or any authorized officer of the KVIC/Govt.
  1. The institutions should give preferance to procure said varieties through Govt. agencies viz.State Level Cotton Federations, Local Regulated Market, Agricultural Producers Marketing Committee and National Agricultural Federation and such other organizations.
  1. The institution should constitute purchase committee comprising ofminimum 5 members as follows:

i)Two representative of the purchasing institution authorized by the Management Committee.

ii)Secretary or his authorized representative from nearby institution.

iii)State/Divisional Director or his authorized representative.

iv)Authorized representative of KVI Board.

  1. One of the representatives of the purchasing institution shall work as Member Convener of the Committee. The quorum of the purchase committee shall be minimum of 3 members.
  1. The institution shall arrange purchase of cotton through an open and verifiable system from reliable parties and maintain detailed records of purchase as mentioned at point 9. The Khadi Institutions are advised to purchase the cotton preferably at the time of first pick or second pick only to ensure the quality of cotton.
  1. The cotton supplier/trader should be registered under the Sales Tax Act/Value Added Tax, Mandi Samiti, Shop & Establishment Act.
  1. The payment of the raw material purchased, should be made only through Account Payee Cheque/Demand Draft or in such other mode through banking channel. No cash transactions should be made and not more than two purchases per month be permitted.
  1. Proper stock entry should be made for the goods/bales purchased and proper transit and adequate stock insurance should be taken by the Khadi Institutions on the procurement of Cotton. The institution should have adequate financial resources in its books of accounts at the time of purchase the raw material from open market.
  1. The following details of the records/register may be maintained by the concerned institutions on purchase of raw material and produce the same as and when sought by the State/Divisional Director or his representatives or any authorized officer of the KVIC/Govt.

i)Name of the institution

ii)The details of Committee (names)

iii)Name & address of the supplier

iv)Variety of cotton

v)Rate of cotton per candy weighing 356 kgs.

vi)Market position regarding supply and rate on the date of purchase.

vii)Procedure adopted by the CPC.

viii)Quantity purchased & value.

ix)Date of purchase

x)Date of dispatch

xi)Mode of transport

xii)Mode of payment

xiii)RR/LR No.

xiv)Details of transit insurance and stock insurance.

xv)Lot test report from Govt. approved testing laboratories.

  1. The cotton purchased from open market or any other sources has to be processed through nearest departmental CSPs or nearby Khadi institutions only that have facilities to convert cotton into sliver/roving and maintain transactional records to provide as collateral evidence as and when required.
  1. The Khadi Institutions which works on NMC and produce yarn/khadi there-from should procure sliver/roving from KVIC departmental CSPs only. However any institution using certain variety of cotton for its use on NMC and those institutions who have facilities to convert cotton into sliver/roving and sliver/roving of such variety is not supplied by KVIC departmental CSPs, under such circumstances the institution must comply with provision as mentioned at Para 10 above.

SILK POLICY

  1. In States where regulated markets have been established by State Govts., silk cocoons should be purchased by the Khadi Institutions through regulated market only. Therefore, no purchase committee is required to be constituted for such States.
  1. In States where regulated markets have not been established by State Govt., the silk producing Khadi institutions may source their required raw material (silk cocoon) from open market adhering to the following guidelines.

(i)The Khadi institutions are permitted to buy cocoon from the Farmers and small vendor on spot by the purchase committee by cash upto Rs.5000/- per farmer considering the peculiar system prevailing in the Bihar, Jharkhand, Orissa, M.P., Chattisgarh and all North Eastern States.

(ii)Total such transactions per year should not exceed Rs.5,00,000/- (Rupees five lakhs only).

  1. The institution should constitute purchase committee comprising of minimum 5 members viz.

i)Two representatives of the purchasing institution – authorized by managing committee.

ii)Secretary or his authorized representative from nearby institution.

iii)State/Divisional Director or his authorized representative.

iv)A representative of Khadi Board

  1. One of the representatives of the purchasing institution shall work as Member Convener of the Committee. The quorum of the purchase committee shall be minimum of 3 members. The presence of one of the Member representing Govt. including KVIC is required while purchasing cocoon in open market/farmer/small vendor.
  1. The indenting silk producing institution should also explore possibilities to procure cocoon through Govt. agencies such as from Central Silk Board, State Silk Board, Concerned State Govt. Sericulture Dept. or State sponsored cocoon farmers co-operatives.
  1. Transit and stock insurance should be done properly by the Khadi Institutions on the procurement of Silk Cocoon, wherever applicable. Proof of source of purchase of raw material made in other States shall have to be provided to authorized officer of the KVIC/Govt.
  1. The payment of the raw material purchased, should be made only through Account Payee Cheque/Demand Draft or any other banking channel except ceiling limits permitted on cash transactions for each transaction and per year.
  1. As of now, there is no Silk Sliver Plant established by the KVIC to cater the needs of silk raw materials to silk producing institutions in the country, therefore till establishment of Silk Sliver Plant, the silk producing institutions are permitted to buy Eri, Muga, Tusser and Matka (Handi) varieties of Silk Sliver from Private firms with collateral evidence which will be checked/ verified by authorized Officers of the KVIC, whenever required.

WOOL POLICY

  1. The policy framed under Cotton is made applicable to the desi wool also. However, Woolen Khadi institutions are permitted to buy desi wool from the Sheppard/Farmers/small vendors on spot by the purchase committee by cash upto Rs.5000/- per farmer. However, such cash transaction should not exceed Rs.5,00,000/- (Rupees five lakhs only) per year. The presence of one of the Member representing Govt. including KVIC is required while purchasing Desi wool in open market/shepherd/small vendor.
  1. In case of merino and cross-breed wool, the institution should procure such varieties from the arrangement made by Rajasthan Khadi Gramodyog Sanstha Sangh, Jaipur or Central or State Boards. The existing policy and guidelines on procurement of merino wool shall continue.

The State/Divisional Directors are requested to issue the above said raw material procurement policy to all Khadi institutions coming under their jurisdiction for necessary compliance.

The circular will be operative with immediate effect.

Sd/-

DIRECTOR (KRM)

To

  1. All State & Divisional Directors
  2. Chief Executive Officer of all State/UT KVI Boards
  3. All Project Manager of Central Sliver Plants of KVIC.

Copy to:

  1. All Zonal Dy. Chief Executive Officers of KVIC
  2. All Commission Members
  3. Director (KC)
  4. Director (KPM)
  5. Director (Accounts)
  6. Director (CCC)
  7. Director (Inspection)
  8. Director (Finance)
  9. Director (Publicity) with a request to publish it in the ensuing issue of Jagriti.
  10. Director (DIT) for placing it on KVIC’s website
  11. Director (State Board Cell)
  12. Director (KD)
  13. Director (SFURTI)
  14. OSD to CEO
  15. A.O. to F.A.
  16. Circular file

Sd/-

DIRECTOR (KRM)

1