Gandhiji settled down in Maganwadi, at the Magan Sangrahalaya premises, Wardha, after his departure from Sabarmati Ashram in Ahmedabad. He named this Ashram after Maganlal Gandhi, his close associate and a rural scientist who had been his right hand in all the earlier three Ashrams but who suddenly died while working, at his behest, in Bihar in 1928.
Dedicated to the cause of village industries, Mahatma Gandhi founded the All India Village Industries Association (AIVIA) by a resolution of the All India Congress Committee on 26th October 1934. Gandhiji was the chairman and Prof. J C Kumarappa the secretary of AIVIA.
The advisory board of AIVIA constituted of towering national personalities like Gurudev Rabindranath Tagore, renowned humanists and international scientists like Dr. C V Raman, Dr. J C Bose, M A Ansari, Satish Chandra Das Gupta, P.C.Ray, Prof. San Higginbottom, Major-General Sir Robert Mc Carrison, Dr. Purushottam Patel, Shri V. Patel, Dr. B.C.Roy, Dr. S. Subbarao, Dr. Rajabally, Dr. Jivraj Mehta, Jamal Mohamed Sahib, Shri Ramdas Pantulu Shri S. Pochkhanawalla and prominent industrialist – Shri G.D.Birla.
Gandhiji and Prof. JC Kumarappa (The great Gandhian economist) spearheaded the all India movement for revival and expansion of various rural industries and artisan-based crafts. Under the able leadership of Kumarappaji, the AIVIA evolved and developed traditional industries and established many new rural industries in various parts of India. The institution conducted a number of training courses for technical personnel and master craftsmen from all over India to run these cottage industries.
To showcase the evolving techniques in rural industrialization, developed at AIVIA, Mahatma Gandhi wanted a dynamic museum that would dissemimate information on new modes of production to the common man and help the poor of the land. Therefore, Gandhiji collected donations from the public and founded the Magan Sangrahalaya. This very first museum of Rural Industries (Magan Sangrahalaya) was inaugurated by Mahatma Gandhi on 30th December 1938.