Modified Market Development Assistance Scheme (MMDAS) 2026 – Financial Assistance up to 35% on Prime Cost

At a glance

Benefits

• Financial Assistance on Prime Cost: 35% on Prime Cost for Khadi (Cotton, Muslin, Wool) and Polyvastra; 20% on Prime Cost for Silk Khadi.
• Distribution for Cotton, Woolen and Polyvastra Khadi: Producing Institutions receive 34% of total MMDA amount; Selling Institutions receive 17%; Artisans (Spinners & Weavers) receive 35% as incentive via Aadhaar‑linked bank/post office accounts; Karyakartas receive 14% as incentive via Aadhaar‑linked accounts; Composite Institutions (both production and selling) receive 51% of total MMDA amount.
• Distribution for Silk Khadi: Producing Institutions receive 40% of total MMDA amount; Selling Institutions receive 20%; Artisans (Reelers, Twisters, Winders & Weavers) receive 30% as incentive via Aadhaar‑linked accounts; Karyakartas receive 10% of total MMDA amount with a maximum ceiling of ₹10,000/- per quarter per Karyakartha, whichever is less; Composite Institutions receive 60% of total MMDA amount.
• Government Supplies (Rate Contract): Artisans and Karyakartas engaged in production for Government supply/Rate Contract are eligible for an MMDA incentive at 17.15% on prime cost (calculated as 35 ÷ 100 × 49).
• Disbursement Conditions: MMDA is disbursed through the KVIC Online Portal via Direct Benefit Transfer (DBT); funds are released quarterly based on actual claims settled in the previous quarter; Directorate of Khadi scrutinises claims and recommends to Directorate of Accounts within 7 working days, which processes and releases funds within 5 working days; utilisation for modernisation, renovation and R&D may be allowed up to two years from actual receipt with specific KVIC sanction.
• Conditions for Availing Benefits: Institutions must maintain a separate bank account for MMDA funds; utilisation certificates must be furnished annually (by a registered CA) and quarterly; artisan payments must be passed on as bonus through Aadhaar‑linked accounts and not included in Khadi cost; producing institutions transferring Khadi wholesale must pass on the relevant percentage (17% for Cotton/Wool/Polyvastra or 20% for Silk Khadi) of MMDA to purchasing/selling institutions via wholesale invoices; claims not submitted within 15 days of quarter completion are forfeited; 100% Aadhaar linkage of artisan bank/post office accounts is required; KVIC ensures achievement of institution‑wise targets for increased production and sales; recovery of dues from MMDA claims shall not exceed 75% of the eligible amount for institutions having a combined production target (Khadi + Polyvastra) up to ₹1,00,00,000/- per annum.

Who can apply (eligibility)

• Applicant must be a Khadi Institution.
• Applicant must be affiliated or registered with Khadi and Village Industries Commission (KVIC), State/Union Territory Khadi and Village Industries Boards (KVIBs), or KVIB units.
• Applicant must hold a valid Khadi/Polyvastra Certificate.
• Applicant must hold a valid Khadi Mark Certificate.
• Applicant's annual budget must be duly approved by KVIC.
• Applicant must be engaged in the activity of production of Khadi to be considered a 'Producing Institution'.
• Applicant must be engaged in the activity of selling Khadi purchased from producing institutions to be considered a 'Selling Institution'.
• Applicant must be engaged in both production and selling of Khadi to be considered a 'Composite Institution'.

Who cannot apply

• 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; however, artisans and Karyakartas of such institutions receive a specific MMDA incentive at 17.15% on prime cost.

Documents required

• At Application Stage: Detailed Claims as per the Prescribed Format (referring to Annexure‑III and Annexure‑IV for utilisation statements).
• At Application Stage: 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 Utilisation Statement of MMDA Grant (Annexure‑III format).
• At Benefit Disbursal / Post‑Disbursal / Monitoring Stage: Annual Utilisation Certificate rendered by a Registered Chartered Accountant (CA), clearly indicating registration number and address of the CA (Annexure‑IV format).
• At Benefit Disbursal / Post‑Disbursal / Monitoring Stage: Receipt of Remittance of Fund to the State Level Artisans Welfare Fund.
• At Benefit Disbursal / Post‑Disbursal / Monitoring Stage: Certificate from the Producing Institution confirming release of the MMDA portion to spinners, weavers and selling institutions for the previous quarter.
• At Benefit Disbursal / Post‑Disbursal / Monitoring Stage: Records for Verification of Payments Made to Each Artisan, preferably through bank or post office account (for KVIC verification).
• At Benefit Disbursal / Post‑Disbursal / Monitoring Stage: Annual Stock Taking Statement (center‑wise) duly signed by authorised stock‑taking persons and authorised office bearers of the institution (to be furnished immediately after completion of the financial year).
• At Benefit Disbursal / Post‑Disbursal / Monitoring Stage: Audited Balance Sheet duly certified by the Chartered Accountant (for authentication of closing stock position).

How to apply

1. 1Visit the KVIC Online Portal (https://kviconline.gov.in/mdaclaims/#).
2. 2Click 'New Registration? Click Here', then select 'Online Registration of Khadi Institutions'.
3. 3Fill in all mandatory fields in the registration form and upload the required documents in the specified format and size; verify your Email ID and Mobile Number via OTP if prompted.
4. 4You will receive your Username, Password, Unique ID and Acknowledgement Letter on your registered mobile number and email ID.
5. 5To submit a quarterly claim, log in to the KVIC Online Portal using the credentials created during registration.
6. 6Click on 'MMDA' and navigate to the application form for the quarterly claim.
7. 7Fill in all mandatory fields and upload the required documents in the specified format and size.
8. 8Review the entered information and uploaded documents; make any necessary corrections.
9. 9Tick the checkbox to acknowledge and agree to the terms and conditions / declaration, then click 'Submit'.
10. 10You will receive a confirmation message; claims must be submitted within 15 days of the completion of the quarter (deadlines: July 15 for Q‑I, October 15 for Q‑II, January 15 for Q‑III, April 15 for Q‑IV).
11. 11Save a copy of your submitted claim and any acknowledgment receipt for future reference.

Frequently asked questions