Small Business

Government Assistance to Small Industries and Small Business Units and the Future

The contribution of small industries and businesses to the Indian economy is simply immeasurable. They not only create wealth and employment but are also a big factor in social development. In fact, so great is their importance that we have a special ministry dedicated to Micro, Small and Medium Industries. So let us learn how our government assists and develops these small industries.

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Government Assistance

The Indian government has been supporting and developing small unit sectors. India is focusing on rural industries and cottage industries. According to layman’s language, a small business is a project or venture that requires a small budget or is run by small group of people.

Both central and state government have been emphasizing more on self-employment opportunities in rural sectors by providing help and support in financing in terms of loans, training in terms of programs, infrastructure, raw materials and technology.

The core purpose of the government is to utilise the local manpower and locally available resources. Which are further transformed into action by local departments, agencies, corporations, etc. The support of small industries include:

Government Assistance to Small industries and business units and the future

Institutional Support

1. National Bank for Agriculture and Rural Development (NABARD)

NABARD established by the government in 1982 to give action and to promote the rural industries. It has adopted multi-purpose strategies in promoting in rural business in India. It supports small industries, rural artisans, rural industries, cottage industries along with agriculture. Also, it sets up training and counselling plus it gives development programmes for rural entrepreneurs.

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2. ‎A Rural Small Business Development Centre (RSBDC)

RSBDC is a government centre sponsored by NABARD for micro, small and medium businesses which is set up by world organization. The primary purpose of RSBDC is to work for socially and financially disadvantaged people and groups. RSBDC does many programmes on skill up gradation, entrepreneurship, awareness, counselling and training.

These programmes motivate various unemployed youth and young women learn different trades and introduce them to other good benefits from it.

3. National Small Industries Corporation (NSIC)

NSIC was set up in 1995 by the government to popularize and support small businesses focusing on commercial aspects. The important functions of NSIC are:

  • Supply imported goods and machine on hire purchase agreement.
  • Procurement of supply imported indigenous raw materials.
  • Developing small business by importing their products.
    ‎Supervising services.
  • ‎Awareness on technical up gradation.

Also, a new scheme called performance and credit rating for small units have been started by NSIC, this ensures that the more their credit rating, the more their financial assistance for their investment and capital requirement.

4. Small Industries Development Bank of India (SIDBI)

It is a top government bank to provide direct and indirect financial support under various schemes to meet credit requirements of various small businesses.

5. ‎The National Commission for Enterprises in the Unorganised Sector (NCEUS)

NCEUS was formed in the September 2004 by the government with objectives:

  • Measures to improve the productivity of small industries in the informal sector.
  • Generation of employment in the rural sector.
  • Creating links between small sector and finance, infrastructure, raw materials and technology.
  • To create public and private partnerships for engagement in imparting skills for the informal sector.
  • Providing micro-finance for the informal sector.
  • Providing social security for the informal sector.
  • To introduce competition of small scale in a global environment.

6. Rural and Women Entrepreneurship Development (RWED)

This is a government organisation that focuses to raise the business environment for women and to support women’s business initiatives. It provides manual for training in entrepreneurship and renders advisory services.

7. World Association for Small and Medium Enterprises (WASME)

WASME is an international body that is nongovernmental organisation of micro, small and medium business units in India which establish an international committee and focus on rural development and apply action plan model for sustained growth of rural industries.

8. ‎Scheme of Funds for Re-generation of Traditional Industries

From 2005, the government established a fund to support these traditional small industries and to facilitate higher productivity and to enhance their growth and development.


The government of India focuses more on the economic and industrial development of backward, hilly and tribal areas of India. Committees have been established to attest and support the growth of small-scale industries and business units and to suggest schemes that are needed.

The programs and schemes vary from state to state. Together they form a package of benefits and incentives to attract industries in the backward areas. Small industries receive various benefits from the government of India such as Land, Power, Water, Sales Tax, Octroi, Raw materials, Finance, Industrial estates and Tax holiday. Even though enough importance is given to backward areas and small industries, there is still an imbalance in their economic growth.


World Trade Organisation facilitates the trades of the present era and there are many reforms as per global expectations. The WTO system contributes to development. On the other hand, developing countries need flexibility in the time they take to implement the system’s agreements.

India is diligent in the framework of World Trade Organisation as it is one of the founder members. Because of it, Indian economy is integrated with the global market and small business can explore capabilities and establish new markets. Indian businesses have to reform over time to keep up with the world’s standard.

With the entrepreneurial spirit, small industries have to adapt to the changing needs of the market driven economy. The government should explore new strategies that encourage partnership between small and large industries.

Solved Question for You

Question: What is Rural Small Business Development Centre (RSBDC)?

Answer: Rural Small Business Development Centre (RSBDC) is a government centre sponsored by NABARD for micro, small and medium businesses which are set up by world organization. The primary purpose of RSBDC is to work for socially and financially disadvantaged people and groups.

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