Micro, Small and Medium Enterprises (MSMEs) have played a vital role in India’s economic development for several decades, contributing significantly to employment generation, rural industrialisation, and balanced regional growth. The sector accounts for nearly 30.1% of India’s GDP and contributes around 45.7% of total exports, with approximately 6.5 crore registered units (PIB, 2024–25). This highlights its importance in promoting inclusive and sustainable economic progress.

Within the MSME sector, Khadi and Village Industries (KVI) hold a unique position due to their strong association with India’s cultural heritage and freedom movement. Characterised by labour-intensive production and low capital requirements, the sector has considerable potential for generating rural employment. The Khadi and Village Industries Commission (KVIC), established under the Khadi and Village Industries Act, 1956, serves as the apex body responsible for promoting and developing this sector. Through key initiatives such as the Prime Minister’s Employment Generation Programme (PMEGP), Scheme of Fund for Regeneration of Traditional Industries (SFURTI), and Khadi Vikas Yojana (KVY), KVIC supports financial assistance, skill development, infrastructure creation, technology upgradation, and market expansion, with a strong focus on women empowerment and the vision of Atmanirbhar Bharat.

Existing evidence suggests that KVIC initiatives have contributed positively to rural entrepreneurship, income generation, and reduction in migration, particularly in regions such as Jammu and Kashmir. Despite these contributions, the literature remains fragmented and largely descriptive. Drawing on Gough’s (2007) systematic review approach, this study synthesizes over two decades of research to identify key trends, policy impacts, and research gaps related to KVIC’s role in financial assistance, rural employment, and women empowerment, while highlighting the need for more robust quantitative and comparative studies.

A growing body of literature has examined the role of KVIC and khadi-based enterprises in promoting rural development and inclusive growth. Several studies highlight that schemes such as PMEGP and SFURTI have significantly contributed to employment generation and the development of micro-enterprises in rural areas (Kumar & Singh, 2018; Sharma, 2020). Research by Reddy (2019) and Mehta (2021) indicates that KVIC-supported initiatives have improved income levels and encouraged self-employment, particularly among economically weaker sections. In terms of women's empowerment, studies have shown that participation in khadi and village industries has enhanced women’s financial independence, decision-making ability, and social status (Patel, 2017; Kaur & Bansal, 2022). Government and policy reports also suggest that KVIC interventions have helped reduce rural–urban migration by creating local livelihood opportunities (Ministry of MSME, 2023; PIB, 2024). However, some studies highlight persistent challenges, including regional disparities in implementation, limited awareness among beneficiaries, and weak market linkages (Gupta & Verma, 2020; Das, 2021). Overall, while existing research provides valuable insights into the positive contributions of KVIC, it also underscores the need for more comprehensive, data-driven, and comparative studies to better understand its long-term impact.

This study follows Gough’s (2007) systematic review approach to guide the literature review. In addition, the PRISMA 2020 (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) framework was employed to ensure a transparent and systematic selection of studies. Relevant literature was identified using key search terms such as KVIC, khadi, rural employment, women empowerment, PMEGP, SFURTI, and Khadi Vikas Yojana across major databases, including Google Scholar, Scopus, ResearchGate, Taylor & Francis, SAGE Journals, and DOAJ. The study selection process involved identification, screening, eligibility assessment, and final inclusion, as illustrated in the PRISMA flow diagram. A total of 3,200 records were initially identified, out of which 400 studies were finally included after applying inclusion and exclusion criteria. Studies were screened based on titles and abstracts, followed by full-text assessment. The selected studies were further evaluated using Gough’s Weight of Evidence framework to ensure methodological rigour, relevance, and quality. The review covers literature published up to 2025, including peer-reviewed articles, government reports, policy documents, and grey literature from sources such as KVIC, the Ministry of MSME, and PIB, to develop a comprehensive understanding of KVIC’s role in rural employment and women empowerment. PMEGP, SFURTI, and Khadi Vikas Yojana across major databases, including Google Scholar, Scopus, ResearchGate, Taylor & Francis, SAGE Journals, and DOAJ.

The study selection process involved identification, screening, eligibility assessment, and final inclusion, as illustrated in the PRISMA flow diagram. A total of 3,200 records were initially identified, out of which 400 studies were finally included after applying inclusion and exclusion criteria. Studies were screened based on titles and abstracts, followed by full-text assessment.

The selected studies were further evaluated using Gough’s Weight of Evidence framework to ensure methodological rigour, relevance, and quality. The review covers literature published up to 2025, including peer-reviewed articles, government reports, policy documents, and grey literature from sources such as KVIC, the Ministry of MSME, and PIB, to develop a comprehensive understanding of KVIC’s role in rural employment and women empowerment.

“What is the impact of KVIC and khadi-based enterprises on financial assistance, rural employment generation, and women empowerment as evidenced by existing domestic and international literature?”

The nomenclature used to identify and classify the reviewed studies is presented in Table 1, which summarises the selected research by Origin, Title of the Study, Aim of the Study, Methodology, Data Analysis, and Results.

Approach to Literature Sourcing and Selection

The search was broad and systematic, to include studies from India and other countries, and encompassed both peer-reviewed research and grey literature, such as government and institutional publications. The literature was collected through Google Scholar, Scopus, ResearchGate, SAGE Journals, Taylor & Francis, and official KVIC, MSME, and PIB portals, using key terms such as Khadi, Village Industries, KVIC, Rural Employment, PMEGP, and SFURTI to ensure effective capture of relevant studies.

Exhibit 2: Selection and Elimination Standards Applied in the Study

Source: Adapted and synthesised from the works of Gough (2007).

This study underscores the important role of the Khadi and Village Industries Commission (KVIC) in financial inclusion, women's empowerment, and rural sustainability. KVIC initiatives are consistently shown to be very effective, thanks to prime programs like the PMEGP, Khadi Vikas Yojana (KVY), and and SFURTI,, which have ensured the creation of many new jobs, self-employment, and higher salaries.

Summary of Reviewed Literature

A summary of the literature presented in Exhibit 4 outlines the study’s background, methodology, and outcomes that can inform the empirical examination of KVIC’s economic and social contributions. But most studies are limited to a few states and use small sample sizes, limiting generalisability. Qualitative studies with a focus on major themes are summarised in Exhibit 5, namely, financial assistance, employment generation, women’s participation, and policy outcomes.

Profile of Reviewed Studies

This study focuses on the most important Indian states with significant Khadi and Village Industries (KVI) activities, such as Gujarat, Maharashtra, Tamil Nadu, Kerala, Karnataka, and Madhya Pradesh, and includes a small number of international comparative studies. The review mainly analyses KVIC programs such as PMEGP, SFURTI, and Khadi Vikas Yojana (KVY) in terms of financial aid, rural employment, and women's empowerment. Together, all the body of literature shows that they reflect the contributions of khadi and village industries to rural livelihoods and social welfare in India.

Relevance of Literature Reviewed

Title, abstract, and relevance-based inclusion criteria were strictly applied when selecting both indexed and non-indexed studies for this review (see Table 2). Literature concerning financial support, rural jobs, and empowering women through KVIC and Khadi industries was given preference. The chosen works are of the desired quality, validity, and contextual appropriateness and are thereby fit to be included within this systematic review.

QUALITY EVALUATION OF STUDIES

Exhibit 3 offers the quality assessment of the studies reviewed hereunder using Gough's (2007) Weight of Evidence (WoE) framework. Every study was critically examined for

Methodological coherence, clear results, and correspondence with the research aims. Most papers demonstrated sound analytical approaches and strong relevance, thereby strengthening the credibility and reliability of the overall review findings.

ROFILE OF REVIEWED STUDIES

Balasubramanyam (2015) provides a descriptive assessment of the performance of Khadi and Village Industries (KVI) and their role in rural development. Patil (2021) and Pradeepa and Paul (2020) analyse trends in production, employment, and sales, with emphasis on financial assistance under KVIC schemes. Similarly, Shailaja (2022) and Saravanan and Selvan (2023) evaluate the impact of Khadi Vikas Yojana and SFURTI on employment generation and entrepreneurship among rural and women artisans.

METHODOLOGICAL FRAMEWORK

The study uses a descriptive, exploratory, and analytical research design, drawing on field surveys, secondary data, and policymakers’ reviews. It analyses financial assistance, rural employment and women empowerment under KVIC. The qualitative analysis compares KVIC and village industry growth achievements in the study area primarily by region. This gives a glimpse of sectoral development.

PERSPECTIVES

Conceptual Background and Research Analysis on KVIC and Khadi Industries in India. While previous studies acknowledge KVIC as essential infrastructure for rural development, they identify challenges in modernisation, credit, and marketing. Subsequent studies find positive effects of PMEGP, SFURTI, and the Khadi Vikas Yojana on rural employment and women's entrepreneurship, while more recent research points to persistent constraints, including low productivity, limited technology adoption, and weak digital marketing.

The thematic analysis of the reviewed literature (as presented in Exhibits 4 and 5) reveals that KVIC has made substantial contributions to rural development through its flagship programmes such as PMEGP, SFURTI, and Khadi Vikas Yojana. These initiatives have been widely recognised for promoting self-employment, supporting micro-enterprises, and enhancing livelihood opportunities in rural areas. A significant finding across studies is the increased participation of women in economic activities, particularly in traditional, home-based, and cluster-driven industries, which has contributed to financial inclusion and social empowerment.

At the same time, the discussion highlights several structural and operational challenges that continue to affect the effectiveness of KVIC initiatives. These include regional imbalances in implementation, limited awareness among beneficiaries, administrative delays, weak market linkages, and inadequate digital integration. Furthermore, while many studies report positive outcomes, most are descriptive and geographically concentrated, limiting the generalisability of their findings.

Overall, the discussion underscores that KVIC remains a vital institutional mechanism for fostering inclusive rural development. However, enhancing market access, strengthening digital infrastructure, and adopting more evidence-based and gender-responsive approaches are essential for improving the long-term impact of khadi and village industries. These findings are consistent with earlier research on systematic review methodologies and rural development frameworks (Ranjan & George, 2016; Gough, 2007).

Opportunities for Rural Entrepreneurs and Women Artisans

The Khadi & Village Industries Commission (KVIC) has established itself as an influential organisation in promoting self-employment and rural development by developing skills at the intersection of traditional and modern. Through programs like PMEGP, SFURTI, and Khadi Vikas Yojana (KVY), KVIC also provides financial support, skill development, income generation, and market access for women artisans in particular. Subsidies, working capital, training, and digitalisation have been empirically demonstrated to increase employment opportunities and the competitiveness of khadi products in domestic and global markets.

Empirical Insights

Based on the case study evidence, KVIC’s financial support programmes have resulted in job creation, women’s self-employment, skill development, and income stability in rural areas. An integrated model of training, subsidies, and raw material assistance has supported sustainable livelihoods. Nevertheless, according to the literature, this is accompanied by a requirement for more rigorous monitoring, better digital infrastructure, and gender-sensitive training to ensure fair and sustainable benefits across regions.

Challenges for KVIC and Khadi Industries

However, KVIC has problems, including regional disparities, low scheme awareness, limited access to formal credit, and delays in the administration of PMEGP, SFURTI, and KVY. Women artisans are frequently deprived of opportunities for decision-making, market access, and training; technology lags, and low digital literacy diminishes their capabilities. Evidence from the literature indicates a need for better coordination among policy institutions, broader financial inclusion, digital modernisation, and skills development and capacity building if KVIC is to be effective in the long term

This study presents a systematic review of 400 research articles to examine the role of the Khadi and Village Industries Commission (KVIC) and khadi-based enterprises in promoting financial assistance, rural employment, and women empowerment in India. The review was conducted using the PRISMA 2020 framework to ensure a transparent and structured selection of studies, while Gough’s (2007) Weight of Evidence approach was applied to assess the quality and relevance of the selected literature.

The findings clearly indicate that KVIC initiatives, particularly PMEGP, SFURTI, and Khadi Vikas Yojana, have played a significant role in generating rural employment, encouraging self-employment, improving income levels, and enhancing women’s participation in economic activities. The sector has contributed to strengthening rural livelihoods and reducing migration, especially in economically weaker and traditional communities.

However, the review also identifies several persistent challenges, including regional disparities in implementation, limited awareness of schemes, weak market linkages, low levels of digital adoption, and relatively modest income gains for women artisans. In addition, a large proportion of the reviewed studies are geographically limited and descriptive in nature, which restricts broader generalisation of findings.

Overall, KVIC remains a crucial institutional mechanism for promoting inclusive and sustainable rural development in India. Future research should focus on large-scale quantitative studies, cross-regional and comparative analyses, and impact evaluation using advanced statistical methods. Further, there is a need to explore the roles of digital platforms, e-commerce integration, and gender-sensitive policy interventions in enhancing the long-term effectiveness of KVIC initiatives in improving rural livelihoods and women's empowerment.

Declaration of Conflicting Interests

All authors contributed equally to conceptualisation, methodology, data collection, analysis, and manuscript preparation. The authors declare no conflicts of interest.

Funding 

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

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