Any industry located in a rural area which produces any goods or renders any service with or without the use of power specified from time to time by the Khadi & Village Industries Commission. Village industries are mainly concerned with the processing of local raw materials for local markets with simple techniques. The scope for such industries depends, in part, on their relation to the corresponding large-scale industry, in part, on the development of agriculture and the growth of rural amenities. As agriculture becomes more intensive, there will be greater demand for certain articles of consumption and tools and implements which could be met by village industries. Amenities in rural life such as supply of pure drinking water, street lighting, sanitation, hospitals, recreation grounds, community centres and roads increase the field for village industries. The possibility of turning waste into wealth, for instance, production of gas from cow dung and other refuse of the village through gas plants in so far as the operations prove economic, production of bone manure through bone digesters, soap making out of non-edible oils, etc., will further provide scope for the development of village industries.
As per the Assam Khadi & Village Industries Board Act, Khadi and Village Industries are specified as below: