KVIC in Hill Areas Development Frances Sinha Sanjay Sinha The promotion of industries based on local resources and skills is a vital component of planning for employment and income distribution. In the context of local resources and needs on the one hand, and poor infrastructural facilities on the other; woollen textile production in the cottage sector appears to be an important industry for hilt areas development This paper is being published in two parts. The first part, which appeared last week, attempted to gauge the importance of woollen textile production in the economy of the Kumaon hills of Uttar Pradesh, the pattern of employment in the cottage industry, and in particular, its significance as a home-based economic activity for women. Against the background of the increasingly dominant role assumed by the Khadi institutions in this sector, Part II of the paper, which appears below, examines the role and effectiveness of these institutions in generating income and employment in the industry.