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Performance Analysis of Khadi and Village Industries of MSME Sector

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 Financial Technology and Business in the Era of Industry 4.0

Performance Analysis of Khadi and Village Industries of MSME

Sector

Shallini .V1 , Sujith .T .S2 , Dr. M. Sumathy3

1Ph.D. Research Scholar, School of Commerce, Bharathiar University, Coimbatore.
Email: shallusamaira@gmail.com
2Ph.D. Research Scholar, School of Commerce, Bharathiar University, Coimbatore.

Email: sujiththelapurath@gmail.com
3Professor and Head, School of Commerce, Bharathiar University, Coimbatore

Abstract
The term "khadi" associated with Indian culture and can be traced back to the times of
Indian freedom struggle led by father of the nation, Mahatma Gandhi. The productivity of
khadi and village industries became a great symbol of nationalism.The importance of khadi
and village industry is linked to rural industrialization, which leads to the welfare and
economic development of the rural population and regionally balanced growth of the
economy. Khadi activity is considered as a potential tool for creating employment
opportunities at the doorstep of rural artisans with very low capital investment. KVIC is a
statutory body promoting the production and sale of Khadi.More than 2737 Khadi
companies are implementing the schemes of KVIC in India. More than 4.97 lakh people are
involved in this activity. Of these, more than 80 percent are women artisans. As part of
MSMEs, the Khadi and Village Industries sector plays an important role in productivity
and employment generation.And the sector contributes to the economic growth of the
country. This paper has attempted to analyze the performance of the KVI sector in terms of
production, sales and employment. For the purpose of studying the performance of KVI
sector, data was collected from secondary sources like journals, annual reports and other
websites. The collected data is tabularized with the help of statistical tools.

Keywords: KVIC, MSME, Production, sales, employment, economic development.

1. INTRODUCTION

Khadi and village commission is a statutory body of the Indian constitution which comes
under the ministry of micro, small and medium enterprises. It was established by the KVIC
Act of 1956 and has been amended twice, in 1965 and 2006. KVIC aims to plan, facilitate,
promote, organize, and assist in the establishment and development of khadi & village
industries in rural areas. It was setup by the government of India with a view to assist in
building up reserves of raw materials for supply to the producers as well as their
processing, thereby creating employment opportunities in the rural sector. The KVI series
plays a top-tier role in providing employment opportunities to the society. At hand there
are 30 state khadi and village industries boards processing all over India. All these boards
are habitually supportive of the implement agencies in the village industries program.

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KVIC established offices in each state, mostly in state capitals like Shillong, Guwahati,
Gangtok, Itanagar, Dimapur, Imphal, Aizawl, and Agartala. Guwahati is home to a regional
office tasked with overseeing and implementing various Khadi and village industry
programs.

Khadi Sector in India

 Following independence, the productivity of Khadi and Village Industries became a

grand symbol of nationalism. As a result, Khadi became known as more than just a
piece of cloth, but as a symbol of freedom and self-sufficiency.
 Khadi and Village Industries Commission is a Statutory Organization tasked with
promoting Khadi production and sale. In India, over 2863 Khadi Institutions form a
vast network that implements KVIC programmes. This activity employs over 4.97
million people. More than 80% of them are female artisans.
 Khadi is a special initiative of KVIC that is being carried out by Khadi Institutions. It
is a potent tool for generating employment right at the doorstep of artisans. Khadi
Institutions are able to offer employment opportunities owing to the support given
through the Modified Market Development Assistance (MMDA) and Interest
Subsidy Eligibility Certificate (ISEC) Scheme.
 Production and sales in the Khadi sector increased last year. Khadi industry
production and sales for the previous four years, as well as the current year 2021–
2022, are predicted to continue until March 31, 2022.

2. REVIEW OF LITERATURE

(ReetuMurlidhar Tanwani et. al., 2022) examined the vital role of Micro, small and
medium enterprises sector in India. The Khadi and village Industries contributing in
upgrading the exports of products and employment and developing the rural areas is
unrivaled. The study also finds that the Khadi and Village Industries commission takes
several steps with Micro small and medium enterprises to develop the KVI, as a result,
Khadi and village Industries is one of the victorious sectors of MSME. This paper assesses
the contribution of Khadi and village industries in employment and also KVIC has facing
the certain challenges and it is essential to trounce these challenges to attain the growth and
development of KVI.

(Shruti Parashar, 2022) conducted the study among the college students to ascertain the
understanding about the khadi cloths and the reviews were made concerning the quality,
style, on purchase they purchase and the khadi shop sponsored by khadi village and
industries commission in the Banasthali university using the survey method and the results
exhibits that khadi can no more be deserted and it soon becoming a fashion tool.

(T. Chandra Kumari et. al., (2022) explained that khadi village and industries engage lower
in investments and significantly posses the positive impact in the economics of developing
countries like India. In this study the researcher has made an attempt to exhibits the
challenges and prospects that are carried over by the village and industries scholars. In this

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paper she concluded that the industries can stimulate the growth of entrepreneurship by
making use of more unskilled labors force and it shows the direct impact on poverty
mitigation they have the spread effect on domestic market. These industries have a huge
potential for creating employment since they use a greater proportion of domestic inputs,
indigenous raw materials, and domestic technology. This increases the significance of
Khadi and village industries.

(Pradeepa. V. et.al.,(2020) studied the Performance of Khadi and Village Industries in

Kerala," they recommended that the government take the required actions to enhance
Kerala's Khadi and Village Industries in order to encourage the expansion of this sector. It
is necessary to launch new efforts in the areas of value-added products, worker training,
marketing, production, and financial support. These will undoubtedly support the
development of Kerala's village and khadi industries.

3. OBJECTIVES

1. To study the trend of Khadi and village industries employment, production and
sales
2. To analyze the relationship among employment and sales of KVI with respect to
production of KVI

4. METHODOLODGY

In this research paper secondary data has been used on a yearly basis which is collected
from various sources like reports of government and other articles related to Khadi and
village industries. The quantitative analysis has been made for correlation and regression
methods are used.

5. RESULTS AND DISCUSSION

Production, sales, and employment are evaluated separately with the help of trend lines
and analysis made with the use of correlation and regression. In this paper, the researcher
attempted to examine the relationship between production with respect to sales and
employment. Sales have been found to be significant for production, but employment has
not, therefore we removed it from the model.

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Figure-1: Khadi and Village Industries production

The figure 1 shows the khadi and village industries production. This displays fluctuation
trend in production during the study period 2017-2022. There was a significant increase in
production of khadi and village production in the years 2019- 2020 and 2021-2022.

Figure-2: Khadi and Village Industries sales

The figure 2 shows the khadi and village industries sales. This displays the increasing trend
in production during the study period 2017-2022. There was a significant increase in
production of khadi and village production in the years except during the year 2020-2021.

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Figure-3: Khadi and Village Industries Employment

The figure 3 shows the khadi and village industries employment. This displays the
increasing trend in employment during the study period 2017-2022. There was a significant
increase in production of khadi and village production in the years.

Table-1:Correlation
Production Sales
Pearson Correlation 1 .973**
Production Sig. (2-tailed) .005
N 5 5
Pearson Correlation .973** 1
Sales Sig. (2-tailed) .005
N 5 5
Correlation is significant at the 0.01 level (2-tailed).

The above outcome indicates the degree of correlation and significant level of production in
relation to sales. There is a positive highly correlation occurs between the production and
sales at a degree of 0.973. The p value .005 indicates that the production and sales are
statistically significant.

Table-2: Regression Analysis

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .973a .948 .930 102.13053

Table 2 shows that the R-Value is 0.973, indicating that the independent variable are
correlated with the dependent variable. The R2 value is 0.948, indicating that 94.8% of the
variance in the dependent variable.

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Table-3: ANOVAa
Sum of
Model df Mean Square F Sig.
Squares
Regression 567008.990 1 567008.990 54.360 .005b
1 Residual 31291.934 3 10430.645
Total 598300.924 4
Dependent Variable: Production
Predictors: (constant), Sales
Table 3 depicts the impact of sales on production in khadi and village industries sector. The
p value is 0.005 which is less than 0.05, the null hypothesis is rejected. It means that the
independent variable have a significant impact on the dependent variable.
So the regression equation is

Y = 452.074 + 0.452

Table-4:Coefficients
Unstandardized Standardized
Model Coefficients Coefficients T Sig.
B Std. Error Beta
(Constant) 452.074 226.436 1.996 .140
1
Sales .452 .061 I.973 7.373 .005
a. Dependent Variable: Production

6. CONCLUSION

Khadi‘s toughest task is to mimic the counterfeit products sold globally as khadis, from
brands, handlooms, mould made and ethnic markets. Thus,khadi opens up the entire
market to immigrant goods, allowing it to be filled with items and brands as well as a
service renowned for its rich history and nostalgic value. It can be difficult and lucrative to
create new, market driven for teens whom are fashion aware. To maintain stable earnings,
boost profits, and keep the artisans in a state of flux, it‘scritical to pay attention on schedule
and in full. In khadi and village industries of India the sale and production are effectively
correlated. In khadi and village industries sales make a larger contribution to the expansion
and growth of output level.In conclusion, due to the region's enormous untapped potential
for natural resources, labour, and its geographical limitations that prevent the
establishment of heavy industries, Khadi and Village industries are a foundation for rural
industrialization in India.

7. REFERENCES

1. Pradeepa. V. M1, Dr. P. C. Jose Paul (2020), “Performance of Khadi and Village
Industries in Kerala‖ International Journal ofAll Research Education and Scientific
Methods (IJARESM), ISSN: 2455-6211 Volume 8, Issue 12, December-2020, pp. 1645-
1648.

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2. Alaguraja, M. and Nedumaran, G. and M, Manida,(2020). Performance of Khadi

and Village Industries Commission Through Micro, Small, & Medium Enterprise
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