MMDAS

1. The applicant must be a Khadi Institution.
2. The applicant must be affiliated or registered with Khadi and Village Industries Commission (KVIC), State/Union Territory Khadi and Village Industries Boards (KVIBs), or State/Union Territory Khadi and Village Industries Board units.
3. The applicant must hold a valid Khadi/Polyvastra Certificate.
4. The applicant must hold a valid Khadi Mark Certificate.
5. The applicant's annual budget must be duly approved by Khadi and Village Industries Commission (KVIC).
6. The applicant must be engaged in the activity of production of Khadi to be considered a "Producing Institution" for the purpose of Market Development Assistance.
7. The applicant must be engaged in the activity of selling Khadi purchased from producing institutions to be considered a "Selling Institution" for the purpose of Market Development Assistance.
8. The applicant must be engaged in both production and selling of Khadi to be considered a "Composite Institution".

Not eligible

1. The production of Khadi and Polyvastra products for Government supplies under Rate Contract (RC) of DGS&D is not eligible for the full Modified Market Development Assistance, as these items are not sold through retail outlets.
2. However, artisans and Karyakartas of Khadi Institutions engaged in such production and supply are eligible for a specific MMDA incentive.

Financial Assistance on Prime Cost

• Rate: The Modified Market Development Assistance (MMDA) is calculated at 35% on Prime Cost for Khadi (Cotton, Muslin, Wool) and Polyvastra. For Silk Khadi, the MMDA is calculated at 20% on Prime Cost.
• Definition of Prime Cost: Prime Cost includes the cost of raw material plus conversion charges up to grey cloth plus processing charges, explicitly excluding establishment margin, trade margin, insurance, and bank interest.
• Distribution of MMDA (for Cotton, Woolen, and Polyvastra Khadi)

Producing Institutions

• 34% of the total MMDA amount.
• These funds are to be utilized for procuring tools and equipment, upgrading technology, engaging designers and consultants for new designs, value addition to post-fabric processes, and engaging technicians for maintenance of Charkhas, looms, and other equipment.
• Selling Institutions
• 17% of the total MMDA amount.
• These funds are for sales promotional activities such as computerization, bar-coding, billing, debit/credit card swiping machines, accounts, renovation of sales outlets, introduction of mobile sales vans, participation in domestic and international exhibitions, extension of sales discounts, and capacity building of sales personnel.
• Artisans (Spinners & Weavers)
• 35% of the total MMDA amount, passed on as an incentive or bonus through their Aadhaar-seeded bank or post office accounts.
• Karyakartas
• 14% of the total MMDA amount, passed on as an incentive or bonus through their Aadhaar-seeded bank or post office accounts.
• Karyakartas include persons involved in production and post-production activities such as salesmen, saleswomen, cashiers, accountants, marketing executives, helpers, tailoring staff, store-keepers, and godown-keepers.
• It also covers artisans engaged in pre-processing activities of spinning and weaving, and processing of Khadi and Polyvastra such as dyeing, who are workers of Khadi Institutions working in production centers.
• Composite Institutions

1. The scheme "Modified Market Development Assistance Scheme" was launched on 1st April 2010 by the Ministry of Micro, Small & Medium Enterprises (MSME), Government of India. The scheme aims to rationalize financial assistance, promote market segmentation, strengthen marketing networks, and provide incentives to artisans and Karyakartas. The scheme provides financial assistance, calculated at 35% on Prime Cost for Khadi (Cotton, Muslin, Wool) and Polyvastra, and 20% on Prime Cost for Silk Khadi, distributed among producing institutions, selling institutions, artisans, and Karyakartas.
2. Rate: The Modified Market Development Assistance (MMDA) is calculated at 35% on Prime Cost for Khadi (Cotton, Muslin, Wool) and Polyvastra. For Silk Khadi, the MMDA is calculated at 20% on Prime Cost.
3. Definition of Prime Cost: Prime Cost includes the cost of raw material plus conversion charges up to grey cloth plus processing charges, explicitly excluding establishment margin, trade margin, insurance, and bank interest.

Producing Institutions

1. 34% of the total MMDA amount.
2. 17% of the total MMDA amount.
3. 35% of the total MMDA amount, passed on as an incentive or bonus through their Aadhaar-seeded bank or post office accounts.
4. 14% of the total MMDA amount, passed on as an incentive or bonus through their Aadhaar-seeded bank or post office accounts.
5. Khadi institutions involved in both production and selling activities receive 51% of the MMDA amount, to be utilized for both product development and market development purposes.
6. 40% of the total MMDA amount.
7. Selling Institutions: 20% of the total MMDA amount.
8. Artisans (Reelers, Twisters, Winders & Weavers): 30% of the total MMDA amount, passed on as an incentive or bonus through their Aadhaar-seeded bank or post office accounts.
9. Karyakartas: 10% of the total MMDA amount, passed on as an incentive or bonus, with a maximum ceiling of ₹10,000/- per quarter per Karyakartha, whichever is less.
10. Composite Institutions: Khadi institutions involved in both production and selling activities receive 60% of the MMDA amount.
11. However, only artisans and Karyakartas of Khadi Institutions engaged in production and supply for Government supply/Rate Contract will be eligible for an MMDA incentive at 17.15% on prime cost (calculated as 35 ÷ 100 × 49).
12. Utilization of MMDA for specific purposes such as modernization, renovation, and research and development may be allowed up to two years from the date of actual receipt, with specific sanction from KVIC.
13. Transfer to Selling Institutions: Producing institutions transferring Khadi wholesale must pass on the relevant percentage (e.g., 17% for Cotton/Wool/Polyvastra or 20% for Silk Khadi) of the MMDA amount to purchasing/selling institutions through wholesale invoices.

At Application Stage

• Detailed Claims as per the Prescribed Format (The MMDA guidelines specifically reference Annexure-III and Annexure-IV for utilization statements, which are part of the claim submission).
• Quarterly Claims of Modified Market Development Assistance on Prime Cost for the Production Achieved during the Preceding Quarter.
• At Benefit Disbursal / Post-Disbursal / Monitoring Stage
• Quarterly Utilization Statement of Modified Market Development Assistance Grant (in Annexure-III format).
• Annual Utilization Certificate rendered by a Registered Chartered Accountant (CA), clearly indicating registration number and address of the CA (in Annexure-IV format).
• Receipt of Remittance of Fund to the State Level Artisans Welfare Fund (This was required under previous MDA guidelines to ensure artisan welfare measures).
• Certificate from the Producing Institution confirming release of the Modified Market Development Assistance portion to spinners, weavers, and selling institutions for the previous quarter.
• Records for Verification of Payments Made to Each Artisan, preferably through bank or post office account (for KVIC verification).
• Annual Stock Taking Statement (center-wise) duly signed by authorized stock-taking persons and authorized office bearers of the institution (to be furnished immediately after completion of the financial year).
• Audited Balance Sheet duly certified by the Chartered Accountant (for authentication of closing stock position).