Office of Development Commissioner (Handicrafts)

Cluster Section


Subject:  Frequently asked questions (FAQs) under AHVY scheme- reg.






What is Baba Saheb Ambedkar Vikas Hastshilp Yojana `

Ambedkar Hastshilp vikas Yojana launched in 2001-02 for need based approach for integrated development of handicrafts clusters with participation of craftpersons.  The scheme envisages a package of support to the clusters  the handicrafts artisans which inter-alia includes capacity enhancement of the artisans together with infrastructure support to the clusters.  The social, technological design and marketing interventions are covered through AHVY. The selected artisans in these clusters are supported for sustainable development through NGO partners for a period of 5 years.


The package of support under AHVY can be clubbed under the following five parts which have some components:-


1.      Social Interventions

  1. Technological interventions
  2. Marketing interventions
  3. Financial interventions
  4. Cluster specific infrastructure related interventions




What is the main objective of scheme

Diagnostic survey of the identified clusters is the prima-facie requirement for ascertaining the needs of specific interventions required for making the clusters self- sustainable.


Mobilization of the beneficiaries shall be undertaken in the clusters where diagnostic survey has been completed.  This activity shall include mobilizing the artisans into SHGs, thrift and credit, training of SHGs on various aspects of forming and running the community business enterprise.  With introduction of economic reforms through liberalization, privatization and globalization, India has entered into a new era of economic development and therefore, Community Empowerment programme for handicrafts sector/  Cooperative/ SHGs is a must to empower the artisans by making them active entrepreneurs-cum-primary stake holders of development and brining them to a visible platform so as to enhance their operational efficiency and competitiveness to face the new challenges and make them viable and self supporting economic entity.



Who are the eligible organizations for applying the  project under AHVY

Reputed NGOs, Cooperatives, Apex Cooperative societies, Trusts.


Reputed organizationsí COHANDS, EPCH, CEPC, MHSC, IICT, NCDPD, NIFT, NID, University Deptt. DRDA, NISIET, EDIs.


Central/State Handloom and Handicrafts Development Corporations and other related Govt. corporations/ agencies promoted by State Govt or Financial Institutions.


Federations of NGOs/ SHGs Consortium, Associations/ Federations/ Consortium of entrepreneurs, Designers, Exporters.


Organizations registers under Section 25 of Company Act (Non profit) etc.


Organizations registered under proper statute of State/ Central Govt. for sustainable development of identified craft clusters.



Procedure for selection of fresh projects

The NGO may submit their self assessment (optional) to the concerned field office duly filled in along with all the documentary proof.


The Asstt. Director on the basis of the documents provided with the proposals shall review the scoring pattern.


The Asstt. Director  shall not reject any proposal at his level.  All proposals received at HM&SEC shall be forwarded to Regional Office  after grading.


If the difference of points between the assessment of the field office and the NGO is more than 20% (+/-) a committee of 3 officers headed by RD should be formed at the regional office level to review & draw up a final grading.  The concerned IA/ NGO shall be given an opportunity to explain their position & support documents in respect of their claim.  The committee will  have the concerned Assistant Director, and officer of the Regional Office as deemed fit as member and the Regional director as Chairman. 


The consolidated grading of all NGOs under the jurisdiction of concerned regional director should reach the office along with the proposals


Every eligible NGO/IA shall be asked to make a presentation, may be 10 minutes duration, to the above committee on the proposed project covering the objective, their involvement in the proposed cluster, methodology of implementation, marketing channels and other forward & backward linkage. Based  on the merit & selection criteria, the cluster & agency shall to be selected.  A half page note from Regional Director / Regional Screening Committee shall be sent alongwith each proposal justifying the grounds on which the proposal holds merit.


The Implementing agency/ NGOs whose proposals are not recommended by Regional Screening Committee shall be communicated accordingly.


The reason of selection or rejection of each proposal shall be clearly communicated to Hq Office.



Is it mandatory to form the SHG under AHVY




In case the  Self Help Groups  are already formed can their proposal could be considered for direct interventions 

Yes, subject to the recommendation of the Regional Screening Committee.




Whether  those implementing agencies who are already implementing a project is  eligible for another project

Criteria for selection for 2nd cluster

The performance  of implementing agency in previous cluster  should be good


Federation shall be at least one year old


Federation shall be functioning in that cluster


No project shall be sanctioned to the same NGO in the same craft and in the same district.  But a repeat project can be considered only in case another prominent craft in the same district or same craft in another District is selected.


The proposals of NGOs for second cluster may be considered only after obtaining assessment of the first cluster and only in the event of satisfactory implementation of the second cluster may be recommended by the Regional Director to Hq. Office



Is there any specified quota for consideration for fresh cluster for the  State / Union Territory






Whether implementing agency can identify the artisans more than the sanctioned   number of artisans

Yes , but to the  maximum of additional 25% of the sanctioned number of artisans


Whether there is any provision for consideration of fresh proposal under AHVY for the cluster located in the identified tourism places

Yes, due consideration to be given to those areas subject to the fulfillment all the conditions and recommended by the Regional Screening Committee.


Whether there is any provision for participation of cluster SHGs artisans in the Gandhi Shilp bazaar, craft bazaar, IHGF GIFT fairs  etc.



Whether any Theme Based Project (TBP) have been sanctioned

Yes,  3 projects in 21 locations  have been sanctioned




Whether there is any provision for working capital in the scheme

Yes, one time financial assistance is granted as MARGIN MONEY to facilitate the cluster artisans to avail  loans from financial institutions.





Is there any financial limit indicated in the scheme against each artisan for the entire project period

Yes,  maximum of RS. 20,000/- per artisans excluding infrastructure components during the project period of 5 years.




What is credit gurantee scheme

To address the problems of handicrafts artisans were facing the lack of credit, office of DC (H) has launched Credit Guarantee Scheme to alleviate the problem of Collateral Security or 3rd party guarantee and remove impediments to flow of credit to handicrafts sector



Who is eligible organization for availing credit under the scheme

The handicrafts artisans /manufactures/ producers/ who are engaged in manufacturing activities in handicrafts sectors are eligible under this scheme


What is the financial assistance applicable to the eligible organizations

Credit guarantee cover upto 75% of the credit facility as provided subject to maximum of Rs. 18.75 lakhs for loans sanctioned upto Rs. 25.00 lakhs


What is the fee being charged by the Member Leading Institutions under CGS

One time guarantee fee @ 1.5%  for credit upto 2 lakhs of credit sanctioned and Annual Service fee @ 0.75% per annum on the outstanding amounts of the borrowers account.  In addition to this a provision for payment of GF, ASF remitted by the agency every year to CGTMSE.


What is the rate of interest

The rate of interest under the scheme shall not exceed 3% above the prime Lending rate.


What is the new procedure adopted by CGTMSE.

The earlier mechanism through which the guarantee fee was to be provided to CGTMSE was not found suitable for quick disbursal and as a result the banks were not able to disburse loans to the artisans.  The method of providing guarantee fee was therefore changed according to new procedure /system the entire guarantee fee is directly deposited with CGTMSE for quick disbursal of loans to the artisans


What steps are being taken to ensure the maximum issuance of artisans credit card to handicraft artisans






Recently a mega credit camp approach was organized at Moradabad (UP by Punjab National Bank. 500 artisans credit card were issued by the bank representing a sanction of Rs. 6 cores worth of credit.  Similar initiatives were also taken up in other regions of the country to ensure flow of credit to artisans



What is the mode of payment to eligible organizations/ artisans for availing credit from Member Lending Institutions



The mode of payment to eligible organization/ artisan is through  MLIs against the Artisans Credit Card  and Artisans Identity Card