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The Gujarat Khadi and Village Industries Act, 2006

Gujarat · state statute
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GUJARAT ACT NO.    24    OF 2006. 
 
THE GUJARAT KHADI AND VILLAGE INDUSTRIES ACT,  2006. 
 
 
SECTIONS  CONTENTS 
  
 CHAPTER    I   
PRELIMINARY 
1. Short title, extent and commencement. 
2. Definitions. 
  
 CHAPTER    II 
ESTABLISHMENT, INCORPORATION AND 
CONSTITUTION OF BOARD 
3. Establishment and incorporation of Board. 
4. Constitution of Board. 
5. Disqualification of membership of Board. 
6. Term of office of members. 
7. Filling up of vacancies. 
8. Meetings of Board. 
9. Vacancy etc. not to invalidate proceeding of Board or 
Committee. 
10. Temporary association of person with Board. 
11. Committees of Board. 
12. Officers and employees of Board. 
13. Power to make contracts.  
 
 
 
CHAPTER    III  
FUNCTIONS AND POWERS OF BOARD 
14. Functions of Board. 
15. General powers of Board. 
  
 CHAPTER    IV 
PREPARATION AND SUBMISSION OF 
PROGRAMMES 
16. Preparation and submission of annual programme. 
17. Sanction of programme. 
18. Supplementary programme. 
  
 CHAPTER   V 
FINANCES, ACCOUNTS, AUDIT AND DEBTS 
19. Transfer of property. 
20. Funds of Board. 
21. Application of fund and property. 
 2  
22. Grants, subventions and loans to Board. 
23. Powers of Board to borrow money. 
24. Budget. 
25. Sanction of budget. 
26. Supplementary budget. 
27. Annual report. 
28. Further report, statistics and returns.  
29. Accounts and audit. 
  
 CHAPTER   VI   
MISCELLANEOUS 
30. Power to give directions. 
31. Liabilities of members for loss, waste or misapplication. 
32. Power of authorised officer to recover record and money. 
33. Recovery of arrears. 
34. Members of Board and officers and employees of Board 
to be public servants. 
35. Protection of action taken under this Act. 
36. Power to make rules. 
37. Power to make regulations. 
38. Power of reorganisation and dissolution of Board. 
39. Power to remove difficulties. 
40. Removal of doubt. 
41. Repeal and savings. 
  
 SCHEDULE 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 3  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following Act of the Gujarat Legislature, having been 
assented to by the Governor on the 4
th  April, 2006 is hereby published 
for general information. 
                S.S.PARMAR, 
  Secretary to the Government of Gujarat, 
         Legislative and Parliamentary Affairs Department.  
 
GUJARAT  ACT  NO.  24  OF 2006. 
 
(First published after having received the assent of the Governor 
in the “ Gujarat Government Gazette ”, on the 4th  April, 2006).  
 
AN ACT 
to provide for the encouragement, organisation, development and regulation of 
Khadi and Village Industries in the State of Gujarat and to constitute one or 
more Boards to carry out the said objects. 
 
 It is hereby enacted in the Fifty-seventh Year of the Republic of India 
as follows :- 
CHAPTER   I 
 
PRELIMINARY 
 
1.  (1) This Act may be called the Gujarat Khadi and Village Industries 
Act, 2006. 
 
(2)  It extends to the whole of the State of Gujarat. 
 
Short title and 
extent. 
 4  
2. In this Act, unless the context otherwise requires,- 
 
(a)  "Board" means the Khadi and Village Industries Board constituted 
under this section 3; 
 
(b) "Khadi" means any cloth woven on handlooms in India from cotton, 
silk or woollen yarn, handspun in India or from a mixture of any two or 
all of such yarns and certified as khadi by the Khadi and Village 
Industries Commission established under the Khadi and Village 
Industries Commission Act, 1956; 
 
(c)  "member" means a member of the Board, whether an official or a non-
official,  and includes the Chairman, the Vice-Chairman and a 
Member-Secretary of the Board;  
 
(d)  "prescribed" means prescribed by rules;   
 
(e)  "regulations" means regulations made under this Act ;  
 
(f)  "rules" means rules made under this Act ; 
 
(g)  "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 fifty thousand rupees or such other sum 
as may, by notification in the Official Gazette , be specified from 
time to time by the State Government: 
 
Provided that any industry specified in the Schedule and 
located in an area other than a rural area and recognised as a 
village industry prior to coming into force of this Act shall 
notwithstanding anything contained in this sub-clause, continue 
to be a village industry under this Act; 
 
(ii)  any other non-manufacturing unit established for the sole 
purpose of promoting, maintaining, assisting, servicing 
(including other units) or managing any village industry; 
 
(iii) any other industry specified in this behalf by the State 
Government, by notification in the O fficial Gazette,  in 
consultation with the Board. 
    
 Explanation.  - For the purpose of this clause, - 
 
Definitions. 
LXI of 
1956. 
 5  
(1) "fixed capital investment" includes investment in plant 
and machinery and land and building of an industry; 
 
(2) "rural area" means the area comprised in any village, 
and includes the area comprised in any town, the 
population of which does not exceed twenty thousand or 
such other figure as the State Government may, by 
notification in the Official Gazette , specify from time to 
time.  
 
CHAPTER II 
 
ESTABLISHMENT, INCORPORATION AND 
CONSTITUTION OF BOARD 
 
3.  (1) The State Government may, by notification in the Official Gazette , 
establish a Board for the whole of the State to be called the Gujarat State Khadi 
and Village Industries Board. 
 
(2)  The Board shall be a body corporate having perpetual succession and a 
common seal and may sue and be sued in its corporate name and shall be 
competent to acquire, hold and dispose of property, both moveable and 
immoveable and to contract and do all things necessary for the purposes of this 
Act. 
 
(3) The head quarters of the Board shall be at such place as the State 
Government may, by notification in the Official Gazette,  specify. 
 
4. (1) The Board shall consist of non-official members, one from each 
district of the State, in addition to the official members appointed by the State 
Government. The non-official members may be chosen from amongst the 
persons who, in the opinion of the State Government are qualified as having 
had experience and capacity in matters relating to development of khadi and 
village industries. One of the members of the Board shall be appointed by the 
State Government as the Chairman of the Board. The State Government may 
appoint one of the other members as the Vice-Chairman and shall also appoint 
one or two of the remaining members as it thinks fit as the Member-secretary 
or Member-secretaries, as the case may be, of the Board.  The Chairman and 
other members of the Board shall hold office for such period as the State 
Government may, by general or special order, direct. 
 
(2) The Chairman or any other member of the Board may at any time 
resign his office by submitting his resignation to the State Government. 
 
(3) The Chairman and other members shall receive such emoluments as 
may be prescribed. 
Establishment 
and 
incorporation of 
Board. 
Constitution of 
Board. 
 6  
(4)  The emoluments to the members shall be paid from the fund of the 
Board. 
 
5. A person shall be disqualified for being appointed as, or for being, a 
member of the Board, if such person,- 
 
(a) is or is found to be a lunatic or a person of unsound mind and stands so 
declared by the Competent Court; or 
 
(b) is adjudged insolvent; or 
 
(c) has been convicted of an offence involving moral turpitude; or 
 
(d) has any financial interest in any subsisting contract made with or in any 
work being done by the Board, except as a share holder (other than a 
Director) in a company as defined in section 3 of the Companies Act, 
1956: 
 
Provided that where he is a shareholder, he shall disclose to the 
State Government the nature and extent of shares held by him in such a 
company;   
 
(e) has any financial interest in any business dealing by the Board with any 
village industry; or 
 
(f) being an office bearer of a village industry is held responsible by the 
Board for any default in payment of its dues by village industry to the 
Board ; or 
 
(g) holds any office of profit under the Board; or 
 
(h) has directly or indirectly, by himself or his partner or by a member of 
his family, any share or interest in any transaction of loan or money 
borrowed by any village industry from the Board; or 
 
(i) has directly or indirectly, by himself or his partner or by a member of 
his family, any share or interest in any work done by the order of the 
Board; or 
 
(j) has remained absent from three consecutive meetings of the Board 
without the leave of the Board. 
 
6. (1) The members of the Board other than ex-officio  members, shall hold 
office during the pleasure of the State Government. 
 
Disqualification 
of membership of 
Board. 
Term of office 
of members. 
1 of 1956. 
 7  
(2)  The members of the Board other than ex-officio  member may resign 
from his office by tendering his resignation in writing to the State Government 
and such resignation shall take effect from the date of acceptance by the State 
Government.  
 
7. Whenever any vacancy occurs in the office of a member of the Board 
other than ex-officio  member, by reason of death, resignation or otherwise, it 
shall be filled in by the State Government as early as may be practicable after 
occurrence of such vacancy. 
 
8. (1) The Board shall meet at least once in every three months, at such 
time and place and shall observe such rules of procedure in regard to the 
transaction of its business at its meetings (including quorum at such meetings) 
as may be provided by the regulations. 
 
(2) All the questions at a meeting of the Board shall be decided by a majority 
of the members present and voting and, in the event of an equality of votes, the 
Chairman shall have and exercise a second or casting vote. 
 
9. No act or proceeding of the Board or any of its committee shall be 
invalidated merely by reason of - 
 
(a)  any vacancy therein, or any defect in the constitution thereof, or 
(b)  any disqualification of or any defect in the appointment of a person 
acting as a member thereof,  or 
(c)  any irregularity in its procedure not affecting the merits of the case. 
 
10. The Board may associate itself with any person whose assistance or 
advise is required in performing any of its functions under this Act and such 
person shall have right to take part in the discussion of the Board for the 
relevant purpose but shall not have right to vote. 
 
11. (1) The Board may, subject to any rules made in this behalf, constitute 
one or more committees as it may consider necessary for the purpose of 
discharging of its functions and duties efficiently, for any work or for a 
particular khadi and village industry or for any specified local area. 
 
(2) The constitution of any such committee, the powers, duties and 
functions of the committee and the jurisdiction of the committee shall be such 
as may be determined by the Board.  
 
12.  (1) The State Government shall appoint an officer as it may think fit to 
be the Executive Officer to manage the affairs of the Board. 
 
(2) The powers, functions and duties of the Executive Officer shall be such as 
may be fixed by the Board with the prior approval of the State Government. 
Filling up of 
vacancies. 
Meeting of 
Board. Vacancy etc. 
not to 
invalidate 
proceeding of 
Board or 
Committee. 
Temporary 
association of 
person with 
Board. 
Committees of 
Board. Officers and 
employees of 
Board. 
 8  
 
(3) The Board may, subject to any rules as to creation of posts or payment 
of salaries made in this behalf, appoint such other officers and employees   
sub-ordinate to the Executive Officer as it may think fit for the efficient 
performance of its functions. 
 
(4) The officers and employees appointed under sub-section (3) shall be 
entitled to receive such salaries and allowances and shall be governed by such 
terms and conditions of service as may be determined by regulations. 
 
(5) The officers and employees of the Board shall perform such functions 
as may be imposed upon them by general or special order issued by the 
Executive Officer. 
 
13. (1) The Board may enter into and perform all such contracts as it may 
consider necessary or expedient for carrying out any of the purposes of this 
Act. 
 
(2)  Every contract shall be made on behalf of the Board by the Chairman 
or an officer authorised by the Board in this behalf and be entered into in such 
manner as may be prescribed.  
 
CHAPTER III 
 
FUNCTIONS AND POWERS OF BOARD 
 
14. (1) It shall be the duty of the Board to encourage, organize, develop and 
regulate khadi and village industries and perform such functions as the State 
Government may prescribe from time to time. 
 
(2)  Without prejudice to the generality of the provisions of sub-section (1), 
the Board shall also discharge and perform all or any of the following duties 
and functions, namely:- 
 
(a) to start, encourage, assist and carry on khadi and village 
industries and to carry on trade or business in such industries 
and in the matters incidental to such trade or business;  
 
(b) to help the people by providing them with work in their homes 
and to give loans and other form of monetary help to individuals 
or societies  or  institutions on such terms and conditions as may 
be prescribed; 
 
(c) to encourage establishment of co-operative societies for khadi 
and village industries; 
 
Power to make 
contracts. 
Functions of 
Board. 
 9  
(d) to conduct training centers and to train people thereat  with a 
view to equipping them with the necessary knowledge for 
starting or carrying on khadi and village industries; 
 
(e) (i) to manufacture tools and implements required for 
carrying on khadi and village industries and to manufacture the 
products of such industries, 
 
  (ii) to arrange for the supply of raw materials and tools and 
implements required for the said purpose, and  
 
(iii)  to sell and to arrange for the sale of the products of the  
said industries; 
 
(f) to arrange for publicity and popularizing of finished products of 
khadi and village industries by opening stores, shops, emporia 
or exhibitions and to take similar measures for the purpose; 
 
(g) to endeavour to educate public opinion and to impress upon the 
people the advantages of patronizing the products of khadi and 
village  industries; 
 
(h) to seek and  obtain advice and guidance of experts in khadi and 
village industries; 
 
(i) to undertake and encourage research work in connection with 
khadi and village industries and to carry on such activities as are 
incidental and conducive to the objects of this Act; and 
 
(j) to discharge such other duties and to perform such other 
functions as the State Government may direct for the purpose of 
carrying out the objects of this Act. 
 
15. The Board shall, for the purposes of carrying out its functions under 
this Act, have the following powers, namely:- 
 
(a)  to acquire and hold such moveable and immoveable property as it 
deems necessary and to lease, sell or otherwise transfer any such 
property: 
 
Provided that in the case of immoveable property, the aforesaid 
powers shall be exercised with the previous sanction of the State 
Government; 
 
(b) to incur expenditure and undertake works in any area within its 
jurisdiction for carrying out the provisions of this Act and for framing 
General 
powers of 
Board. 
 10  
and execution of such schemes as may be entrusted to it by the State 
Government, subject to the provisions of this Act and the rules made 
thereunder. 
 
CHAPTER IV 
 
PREPARATION AND SUBMISSION OF PROGRAMMES 
 
16. (1) The Board shall, once every year, prepare annual programme of 
work in such form and at such time of the year as may be prescribed and 
submit the same to the State Government for approval. 
 
(2) The programme shall contain- 
 
(a) particulars of the scheme which the Board proposes to execute 
whether in part  or whole  during the next year; 
 
(b) particulars of any work undertaken which the Board proposes to 
execute during the next year for the purposes of carrying out its 
functions under this Act; and 
 
(c) such other particulars as may be prescribed. 
 
17.  The State Government may approve and sanction the annual 
programme in whole or with such modifications as it deems fit. 
 
18. The Board may prepare and submit a supplementary programme for the 
sanction of the State Government in such form and before such date as the 
State Government may  prescribe and the provisions of section 17 shall apply 
to such supplementary programme. 
 
CHAPTER V 
 
FINANCES, ACCOUNTS, AUDIT AND DEBTS  
 
19.  The State Government may transfer buildings, land or any other 
property to the Board, whether moveable or immoveable, for use and 
management by the Board on such terms and conditions as the State 
Government may deem fit for the purposes of this Act. 
 
20. (1) The Board shall have its own fund and all receipts of the Board 
shall be credited thereto, and all payments by the Board shall be made 
therefrom. 
 
(2) The Board may accept grants, subventions, donations and gifts and 
receive loans from the Government or a local authority or any body or 
Preparation and 
submission of 
annual 
programme. 
Sanction of 
programme. 
Supplementary 
programme. 
Transfer of 
property. 
Funds of Board. 
 11  
association, whether incorporated or not, or an individual for all or any of the 
purposes of this Act. 
 
(3) The Board may spend such sum as it thinks fit for the performance of 
its functions under this Act and such a sum shall be treated as expenditure 
payable out of the fund of the Board. 
 
(4) All moneys belonging to the fund of the Board shall be deposited in 
such manner as the State Government may, by a special or general order, 
direct. 
 
(5) The accounts of the Board shall be operated by such officers jointly or 
individually as may be authorised by the Board. 
 
21. All property, fund and other assets of the Board shall be held and 
applied by it subject to the provisions and for the purposes of this Act. 
 
22. The State Government may, from time to time, make such grants, 
subventions, loans and advances to the Board for the purpose of performance 
of its functions under this Act, on such terms and conditions as the State 
Government may determine in each case. 
 
23. The Board may, from time to time, with the previous sanction of the 
State Government and subject to the provisions of this Act and the rules made 
in this behalf and upon such conditions as the State Government may 
determine, borrow any sum required for the purposes of   this Act. 
 
24. The Board shall prepare its budget for the next financial year in such 
form and at such time in each financial year, as may be prescribed by the State 
Government. The budget shall contain a statement showing estimated receipts 
and expenditure on capital and revenue accounts of the Board according to the 
programme and the Schedule of the stock and forward same to the State 
Government. 
 
25. (1) The State Government may approve and sanction the budget 
submitted to it under section 24 with such modifications as it deems proper. 
 
(2) The Board may re-appropriate such amounts as may be necessary from 
one scheme to another scheme subject to the conditions that the cost of any 
scheme as originally sanctioned shall not be exceeded by more than 33 1/3 per 
cent. 
 
(3) The Board may write off losses up to Rs.5000/- in individual cases and 
not exceeding Rs. 50,000/- in the aggregate in any financial year in cases 
falling under any or all of the following categories:- 
 
Application of 
fund and 
property. 
Grants, 
subventions 
and loans to 
Board. 
Powers of 
Board to 
borrow money. 
Budget. 
Sanction of 
budget. 
 12  
(a) loss of irrecoverable value of stores or of public money due to 
theft, fraud or such other cause; 
 
(b) loss of irrecoverable advance other than loans; and 
 
(c) deficiency and depreciation in the value of stores. 
 
26. The Board may prepare and submit a supplementary budget for the 
sanction of the State Government in such form and before such date as may be 
prescribed and the provisions of section 25 shall apply to such supplementary 
budget. 
 
27.  (1) The Board shall, prepare once in every year in such form and at 
such time as may be prescribed, an annual report giving true and complete 
account of its activities during the previous financial year along with a copy of 
the annual statement of accounts referred to in section 29 and shall submit the 
same to the State Government.  
 
(2) The State Government shall, as soon as may be, after receipt of report 
under sub-section (1), cause the same to be laid before the State Legislature. 
 
28. The Board shall, before such date, at such intervals, and in such 
manner, as the State Government may from time to time direct, submit to the 
State Government a report on such matters and such statistics and such returns 
as the State Government may direct.  
 
29. (1) The Board shall maintain its accounts and prepare the annual 
statement of accounts shall be prepared 
 in such form and in such manner as 
may be prescribed. 
 
(2) The accounts of the Board shall be audited by an auditor, duly qualified 
to act as an auditor of companies under section 226 of the Companies Act, 
1956, who shall be appointed by the Board after approval from the State 
Government. 
 
CHAPTER VI 
 
MISCELLANEOUS 
 
30. (1) The State Governemt may if it thinks fit give directions to the Board 
for carrying out execution of any of the provisions of the Act and the Board 
shall bound by such directions. 
 
(2)  Where the Board makes persistent default in complying with or in 
giving effect to any directions given to it by the State Government under sub-
section (1), it shall be lawful for the State Government to dissolve the Board 
under section 38. 
 
Supplementary 
budget. 
Annual report.  
Further report, 
statistics and 
returns.  
Accounts and 
audit. 
Power to give 
directions. 
1 of 1956. 
 13  
31.  (1) Every member of the Board or its committee shall be personally 
liable for the loss, waste, or misapplication of any money or other property of 
the Board to which he has been party, or which has been caused or facilitated 
by his misconduct or gross neglect of his duty as a member. 
 
(2)  If after giving the member concerned a reasonable opportunity for 
showing cause to the contrary, an officer authorised by the State Government 
is satisfied that the loss, waste or misapplication of any money or other 
property of the Board is a direct consequence of misconduct or gross 
negligence on his part, the officer so authorised shall, by an order in writing, 
direct such member to pay to the Board before a fixed date, the amount 
required to be reimbursed to it for such loss, waste or misapplication. 
 
(3)  If the amount is not so paid, it shall be recovered as an arrears of land 
revenue and credited to the fund of the Board. 
 
(4) Any person aggrieved by the decision or action of the officer so 
authorised may apply to the District Court within one month of the decision or 
action for redressal of his grievance and that court may, after taking such 
evidence as it thinks necessary, confirm, modify or remit the payment to the 
Board. 
 
32.  (1) Where, an officer authorised in this behalf by the State Government 
is of the opinion that any person, who in his capacity as a member, officer, 
employee or secretary of the Board had, in his custody, any record, money or 
other property belonging to the Board, is after his retirement, removal or 
suspension from office, as the case may be, not likely to deliver such record or 
property or pay such money, the officer may, by a written order, require that 
the record, property or money so detained,  be delivered or paid to the Board 
forthwith. 
 
(2)  If any such person as aforesaid shall not deliver the record or the 
property or pay the money as directed, the officer so authorised may cause him 
to be apprehended and may send him with a warrant in such form as may be 
prescribed to be confined in a civil jail till he delivers the record or property or 
pays the money : 
 
 Provided that no such person shall be so detained in confinement for a 
period longer than one calendar month. 
 
(3) It shall be lawful for the officer so authorised- 
 
(a) for recovering any such money to direct that such money be 
recovered as an arrears of land revenue and on such direction 
being given, such money shall be recoverable as an arrears of 
land revenue from such person; 
Liabilities of 
members for 
loss, waste or 
misapplication. 
Power of 
authorised 
officer to recover 
record and 
money.  
 14  
 
(b) for recovering any such record or property to issue a search 
warrant and to exercise all such powers with respect thereto as 
may lawfully be exercised by the Magistrate under the 
provisions of Chapter VII of the Code of Criminal Procedure, 
1973. 
(4) No action under sub-section (1) or (2) shall be taken unless reasonable 
opportunity has been given to the person concerned to show cause why such 
action should not be taken against him. 
33. Where any sum due to the Board in accordance with the terms of a 
contract or otherwise or any sum payable in connection therewith, has not been 
paid, such sum shall, without prejudice to any other remedy provided by law, 
be recoverable as an arrears of land revenue on a certificate in the prescribed 
form being issued by the Board to the Collector. 
34. The Members of the Board or its Committee and officers and 
employees of the Board when acting or purporting to the act in pursuance of 
any of the provisions of this Act, rules or regulations made thereunder shall be 
deemed  to be public servants within the meaning of section 21 of the Indian 
Penal Code. 
 
35. No suit, prosecution or other legal proceedings shall lie against the 
Board or any member or officer or employee of the Board for anything which 
is in good faith done or intended to be done in pursuance of the provisions of 
this Act or any rules or regulations made thereunder. 
 
36. (1) The State Government may, by notification in the Official Gazette , 
make rules for carrying out the purposes of this Act. 
 
(2) In particular, and without prejudice to the generality of the foregoing 
powers, such rules may provide for all or any of the following matters,   
namely :- 
 
(a) The emoluments of Chairman and members of the Board under 
section 4;  
(b)  the manner in which contracts shall be entered into under 
section 13; 
(c) the functions of the  Board under section 14 and terms and 
conditions for loan and monetary help and such form and such 
time for submission of annual programme; 
(d) the other particulars of the annual programme under section 16; 
(e) the form in which and the date before which the supplementary 
programme shall be submitted under section 18; 
(f) the form in which and the date before which the supplementary 
budget shall be submitted under section 26; 
Recovery of 
arrears. 
Members of Board, 
officers and 
employees of Board 
to be public 
servants. 
Protection of 
action taken 
under this Act. 
Power to make 
rules. 
2 of 1974. 
45 of 1860. 
 15  
(g) the manner in which the annual report shall be prepared and 
forwarded to the State Government under section 27; 
(h) the manner of maintenance of accounts and preparation of anual 
statement of accounts under section 29; 
(i) any other matter which is or may be prescribed under this Act. 
 
(3) All rules made under this section shall be laid for not less than thirty 
days before the State Legislature as soon as possible after they are made, and 
shall be subject  to rescission by the State Legislature or to such modifications 
as the State Legislature may make during the session in which they are so laid 
or the session immediately following.  
 
(4) Any rescissions or modifications so made by the State Legislature shall 
be published in the Official Gazette, and shall thereupon take effect. 
 
37. (1) The Board may, with the previous approval of the State 
Government by notification in the Official Gazette , make regulations 
consistent with this Act and the rules made thereunder, for enabling it to 
perform its functions under this Act. 
 
(2) In particular, and without prejudice to the generality of the foregoing 
provision, such regulations may provide for all or any of the following matters, 
namely: – 
 
(a) the procedure and disposal of its business;  
 
(b) remuneration, allowances and other conditions of service of 
officers and servants of the Board; 
 
(c) functions and duties of the officers and servants of the Board; 
 
(d) functions of committees and the procedure to be followed by 
such committees in the discharge of their functions. 
 
(3) All regulations made under this section shall be laid before the State 
Legislature as soon as may be after they are made, and shall be subject to such 
rescission  by the State Legislature or to such modifications as the State 
Legislature may make during the session in which they are so laid, or the 
session immediately following. 
 
(4) Any rescission or modification so made by the State Legislature shall 
be published in the Official Gazette , and shall thereupon take effect. 
 
 
 
 
Power to make 
r
egulations. 
Power of 
reorganization 
and dissolution of 
Board. 
 16  
38.  (1) If it appears to the State Government necessary or expedient that the 
Board should be reconstituted or reorganised in any manner whatsoever or that 
the Board may be dissolved, the State Government may, after consulting the 
Board, by an order published in the Official Gazette , provide for the 
reconstitution, reorganisation or dissolution of the Board with effect from such 
date as may be specified in the order. 
 
(2) Any order made under sub-section (1), may, in particular, provide for 
all or any of the following matters, namely :-  
 
(a) the dissolution of the Board ; 
(b) the reconstitution or reorganisation, in any manner whatsoever, 
of the Board including the establishment, where necessary, of 
new Board ; 
(c) the area in respect of which the reconstituted Board or new 
Board or amalgamated Board shall function or operate; 
(d) the transfer, in whole or in part, of the assets, rights and 
liabilites of the Board (including the rights and liabilities under 
any contract made by it) and the terms and conditions of such 
transfer; 
(e) the transfer or re-employment of any officer and  employees of 
the Board to, or by, any such transferee and the terms and 
conditions of service applicable to such officers and employees 
after such transfer or re-employment; and  
(f) such incidental consequential and supplementary matters as 
may be necessary for the reconstitution, reorganisation or 
dissolution of the Board. 
 
(3) Where an order is made under this section transferring the assets, rights 
and liabilities of the Board, then, by virtue of that order, such assets, rights and 
liabilities of the Board shall vest in, and be the asset, rights and liabilities, of 
the transferee. 
 
(4) Every order made under this section shall be laid before the State 
Legislature, as soon as may be, after it is made. 
 
Explanation. - For the purpose of this section, mere appointment of 
additional members in a Board shall not be deemed to be reconstitution or 
reorganisation of that Board. 
 
39. (1) If any difficulty arises in giving effect to the provisions of this Act, 
the State Government may, by order published in the Official Gazette , make 
such provisions not inconsistent with the provisions of this Act appear to it to 
be necessary or expedient for removing the difficulty: 
 
 Provided that no such order shall be made under this section after the 
expiry of a period of two years from the commencement of this Act. 
 
(2)  Every order made under sub-section (1) shall be laid, as soon as may 
be, after it is made, before the State Legislature. 
Power to 
remove 
difficulties. 
 17  
 
40.  For the avoidance of doubt, it is hereby declared that nothing in this 
Act shall apply to or be deemed to apply to any industry, the control of which 
by the Union is declared by the Parliament by law to be expedient in the public 
interest. 
 
41. (1) The Bombay Khadi and Village Industries Act, 1960, in its 
application to the State of Gujarat is hereby repealed :  
 
 Provided that such repeal shall not affect the previous operation of the 
said Act or any right, title, obligation or liability already acquired, accrued or 
incurred thereunder and subject thereto, anything done or any action taken 
including any appointment, notification, notice, order, rule, form or certificate 
in exercise of any powers conferred by or under the said Act shall, so far as it 
is not inconsistent with the provisions of this Act, be deemed to have been 
done or taken in exercise of the powers, conferred by or under the Act, as if 
this Act were in force on the date on which such thing was done or action was 
taken and all arrears of tax and other amount due at the commencement of this 
Act may be recovered as if they had accrued under this Act. 
 
(2) Without prejudice to the provisions contained in sub-section (2) and 
subject thereto, section 7 of the Bombay General Clauses Act, 1904 shall apply 
in relation to the repeal of the said Act as if the said Act had been enacted 
within the meaning of the said section 7. 
 
Removal of 
doubt.  
Repeal and 
savings.  
Bom. 1 of 1904. 
Bom.XIX of  1960. 
 18  
SCHEDULE  
( See  section 2 ) 
 
Khadi Industry: 
  
Khadi means any cloth woven on handloom in India, from cotton, silk or 
woolen yarn hand spun in India or from mixture of any two or all of such 
yarns. 
 
Village Industries : 
 
Group- I : Mineral Based Industry : 
 
(1) Cottage Pottery Industry (2) Lime Stone, Lime shell and other lime 
products industry (3) Stone cutting, crushing, carving and engraving for 
Temples and Buildings (4) Utility articles made out of stone (5) Slate and Slate 
pencil making (6) Manufacturing of plaster of paris (7) Utensil washing 
powder (8) Fuel briqueting (9) Jewellery out of Gold, Silver, Stone, Shell and 
synthetic materials (10) manufacture of Gulal, Rangoli  (11) Manufacture of 
Bangles (12) Manufacture of paints, pigments, varnishes and distemper (13) 
Manufacture of Glass Toys (14) Glass Decoration – cutting, designing and 
polishing (15) Gem cutting. 
 
Group-II : Forest Based Industry : 
 
(16) Handmade Paper (17) Manufacture of Katha  (18) Manufacture of Gums 
and Resins (19) Manufacture of Shellac (20) Cottage Match Industry, 
Manufacture of fire works and Agarbattis (21) Bamboo and Cane work (22) 
Manufacture of paper cups, plates, bags and other paper container (23) 
Manufacture of exercise book binding, envelope making, register and broom 
making (25) Collections, processing and packing of forest products (26) Photo 
framing (27) Manufacture of Jute Products (under fiber industry) 
 
Group-III : Agro Based and Food Industry : 
 
(28) Processing, packing and marketing of cereals, pulses, spices, condiments, 
masala  etc. (29) Noodles making (30) power atta chakki  (31) Daliya  making 
(32) Mini rice shelling unit (33) Palmgur making and other palm products 
industry (34) Manufacture of Cane Gur and Khandsari  (35) Indian sweets 
making (36) Rasawanti – sugarcane juice catering unit (37) Bee-keeping (38) 
Fruits and vegetable processing, preservation and canning including pickles 
(39) Ghani oil industry (40) Menthol Oil (41) Other than coir (42) Collection 
of forest plants and fruits for medicinal purpose (43) Processing of maize and 
ragi (44) Pith work, manufacture of pith mats and garlands etc. (45) Cashew 
processing (46) Leaf cup making (47) Milk products making unit (48) Cattle 
feed, poultry feed making. 
 19  
Group-IV : Polymer and Chemical Based Industry : 
 
(49) Flaying, curing and tanning of hides and skins and ancillary industries 
connected with the same and cottage leather industry (50) Cottage soap 
industry (51) Manufacture of Rubber goods (dipped latex products) (52) 
Products out of Rexene PVC, etc. (53) Horn and Bone including ivory 
products (54) Candle, camphor and sealing wax making (55) Manufacture of 
packing items of plastics (56) Manufacture of Bindi  (57) Manufacture of 
mehandi (58) Manufacture of Essential oils (59) Manufacture of shampoos 
(60) Manufacture of Hair Oil (61) Detergents and washing powder making 
(non-toxic). 
 
Group-V : Engineering and non conventional Energy : 
 
(62) Carpentry (63) Blacksmith (64) Manufacture of Household aluminum 
utensils (65) Manufacture and use of manure and methane ( Gobar ) Gas from 
dung and other waste products (such as flesh of dead animal, night soils etc.) 
(66) Manufacture of paper pins, clips, safety pins, stove pins etc. (67) 
Manufacture of decorative bulbs, bottles, glass, etc. (68) Umbrella assembling 
(69) Solar and wind energy implements (70) Manufacture of Handmade 
utensils out of Brass (71) Manufacture of handmade utensils out of copper (72) 
Manufacture of handmade utensils out of Bell metal (73) Other articles made 
out of Brass, Copper and Bell metal (74) Production of Radios (75) Production 
of cassette player whether or not fitted with Radio (76) Production of voltage 
stabilizer (77) Manufacture of electronics clocks and alarm time pieces (78) 
Carved wood and artistic furniture making (79) Tin smithy (80) Motor winding 
(81) Wire net making (82) Iron grill making (83) manufacture of Rural 
transport vehicles such as hand carts, bullock carts, small boats, assembly of 
bicycles, cycle rickshaw, motorised carts, etc. (84) Manufacture of musical 
instruments (85) Vermiculture and Waste disposal. 
 
Group-VI : Textile industry (Excluding Khadi) : 
 
(86) Polyvastra which means any cloth woven on handloom in India from yarn 
handspun in India from a mixture of man made fibre with either cotton, silk or 
wool or with any two or all of them or from a mixture of man made fibre yarn 
handspun in India with any two or all of such yarn (87) Manufacture of Lok  
Vastra  Cloth (88) Batick works (89) Toys and Doll Making (90) Thread Balls 
and woolen Balling, Lachchhi  Making (91) Embroidery (92) Manufacture of 
surgical bandages (93) Stove wicks. 
 
Group – VII : Service Industry : 
 
(94) Laundry (95) Barber (96) Plumbing (97) Servicing of Electronics wiring 
and electronics domestic appliances and equipments (98) Repairs of diesel 
engines, pump sets etc. (99) Tyre vulcanising Unit (100) Agriculture servicing 
 20  
for sprayers, Insecticide, pump sets (101) Hiring of sound system like loud 
speaker, amplifier, mike etc. (102) Battery charging (103) Art Board painting 
(104) Cycle repair shops (105) Band troupe (106) Motorised local boat (fibre 
glass) (107) Motor cycle to fly as taxi  (108) Musical instruments. (109) 
Hotel(where wine must not be delivered) (110) Tea Stall (111) Iodised Salt 
(112) Sprayer Insecticide Pump Set etc. services pertaining to agriculture (113)  
Local Boats with machine (Fibre glass).  
  
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