Government's Institutional Support to Small Industries and Business Units

A small business is a project or venture that has a limited budget or is run by a small group of people. The Indian government has been continuously supporting and enhancing small unit sectors in various ways.

FREMONT, CA: Small companies and industries provide an enormous contribution to the Indian economy. They play a major role in social development in addition to producing income and jobs. In fact, their significance is so high that there is a specific ministry for micro, small, and medium-sized enterprises.

India is focusing on rural industries and cottage industries. By providing help and support in financing in terms of loans, training in terms of programs, infrastructure, raw materials and technology both central and state governments have been emphasizing more on self-employment in rural sectors. Using local manpower and locally available resources is the elemental purpose of the government, which is significantly transformed into action by local departments, agencies, corporations, and so on.

The government established the national bank for agriculture and rural development (NABARD) in 1982 to provide assistance and to advance rural enterprises. It has used multifaceted marketing approaches to encourage rural business in India. Together with agriculture, it supports cottage industries, small businesses, rural artisans, and rural industries. Additionally, it establishes programs for training and counselling as well as business growth for rural entrepreneurs.

See Also: Agricultural land investment.

A rural small business development centre (RSBDC) is a NABARD-sponsored government centre for micro, small, and medium-sized businesses that was established by a global organisation. The primary goal of RSBDC is to assist socially and financially disadvantaged individuals and groups. RSBDC offers a variety of programs for skill development, entrepreneurship, awareness, counselling, and training. These programs encourage many unemployed young people and women to acquire various trades and introduce them to additional positive benefits.

To popularise and support small businesses focusing on commercial aspects, the national small industries corporation was set up in 1995 by the government. Also, NSIC has launched a new program called performance and credit rating for small units, which guarantees that the higher their credit rating, the more financial support they will receive for their investment and capital needs.

Small industries development bank of India is a top government bank to provide direct and indirect financial support under several schemes to meet the requirements of multiple small businesses.

The government established the National Commission for Enterprises in the Unorganised Sector in September 2004 with the objectives:

• Measures to increase the productivity of tiny, unregulated industries.

• Employment creation in the rural sector.

• Establishing connections between the small sector and infrastructure, technology, raw resources, and finance.

• To create public and private partnerships for engagement in imparting skills to the informal sector.

• Providing micro-finance for the informal sector.

• Providing social security for the informal sector.

•  To introduce competition on a small scale in a global environment.

Rural and women entrepreneurship development focuses to elevate the business environment for women and to support women’s business initiatives. It offers entrepreneurship training manuals and offers consulting services. In order to help these traditional small businesses, facilitate increased efficiency, and foster their growth and development, the government established a fund in 2005.

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