In force · As amended up to 2026-08
2. Definitions.— In this Act, unless the context otherwise requires, —
(a) "the Board" means the Board constituted under[1] [section 10];
(b) "chairman" means the chairman of the Commission;
(c) "Commission" means the Khadi and Village Industries Commission established under section 4;
2 [(cc) "fixed capital investment" includes investment in plant and machinery and land and building of an industry;]
(d) "khadi" means any cloth woven on handlooms in India from cotton, silk or woolen yarn handspun in India or from a mixture of any two or all of such yarns;
(e) "member" means a member of the Commission[3] [and includes the chairman[4] *];
(f) "prescribed" means prescribed by rules made under this Act;
5[(ff) "rural area" means the area comprised in any village, and includes the area comprised in any town, the population of which does not exceed[6] [twenty thousand] or such other figure as the Central Government may specify from time to time;]
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8* * * * *
9 [(h) "village industry" means, —
(i) any industry located in a rural area which produces any goods or renders any service with or without the use of power and in which the fixed capital investment per head of an artisan or a worker does not exceed[10] [one lakh rupees] or such other sum as may, by notification in the Official Gazette, be specified from time to time by the Central Government:
1. Subs. by Act 36 of 1957, s. 3 and the Second Schedule, for "section 9" (w.e.f. 17-9-1957).
2. Ins. by Act 12 of 1987, s. 2 (w.e.f. 24-7-1987).
3. Subs. by Act 32 of 1961, s. 2, for "and includes the chairman" (w.e.f. 28-8-1961).
4. The words "and the vice-chairman" omitted by Act 12 of 1987, s. 2 (w.e.f. 24-7-1987).
5. Ins. by s. 2, ibid. (w.e.f. 24-7-1987).
6. Subs. by Act 10 of 2006, s. 2, for "ten thousand" (w.e.f. 15-5-2006).
7. Omitted by Act 12 of 1987, s. 2 (w.e.f. 24-7-1987).
8. Omitted by s. 2, ibid. (w.e.f. 24-7-1987).
9. Subs. by s. 2, ibid ., for clause (h) (w.e.f. 24-7-1987).
10. Subs. by Act 10 of 2006, s. 2, for "fifteen thousand rupees" (w.e.f. 15-5-2006).
*. Vide notification No. S.O. 3912(E), dated 30th October, 2019, this Act is made applicable to the Union territory of Jammu and Kashmir and the Union territory of Ladakh.
Provided that any industry specified in the schedule and located in an area other than a rural area and recognised as a village industry at any time before the commencement of the Khadi and Village Industries Commission (Amendment) Act, 1987 (12 of 1987), shall, notwithstanding anything contained in this sub-clause, continue to be a village industry under this Act:
1[Provided further that in the case of any industry located in a hilly area, the provisions of this sub-clause shall have effect as if for the words "one lakh rupees", the words "one lakh and fifty thousand rupees" steal.]
(ii) any other non-manufacturing unit established for the sole purpose of promoting, maintaining, assisting, servicing (including mother units) or managing any village industry;]
3. [ Power to add to the Schedule. ] Omitted by Khadi and Village Industries Commission (Amendment) Act 1987 (12 of 1987), s. 3 ( w.e.f. 24-7-1987).
Source: India Code