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Analysis Of Kurukshetra Magazine(August 2022): Scenario Of Rural Industrialization

Kurukshetra is a Monthly Magazine which is issued by the Publications Division of the GOI.

Kurukshetra Magazine is one of the most important and indispensable source for UPSC Civil Services Exam Preparation. Keeping this in mind, here, we come with ”Analysis Of Kurukshetra Magazine” on daily basis, which covers the monthly Kurukshetra Magazine in easy and smooth pointed form, keeping in mind the demand of UPSC aspirants.


Scenario Of Rural Industrialization: Introduction


  • The primary responsibility of industrial development rests with the State Governments. The Union Government supplements their efforts through various schemes launched by it with a view to promote industrialization in industrially backward areas of the country.
  • Department of Industrial Policy & Promotion (DIPP) is implementing various schemes with a view to promote industrial development of backward areas of the country.


Scenario Of Rural Industrialization: Formal Arrangements for Promotion of Rural Industrialization


  • There are several institutions of the government that support promotion of rural industrialization.
  • The Ministry of Micro, Small and Medium Enterprises encompasses many such organisations.
  • The notable among are: KVIC, National Small Industries Corporation Limited (NSIC), Coir Board and so on. Besides these, there are other organisations such as the Council for Advancement of People’s Action and Rural Technologies (CAPART), National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI) and commercial banks that support rural industrialization.


Scenario Of Rural Industrialization: National Small Industries Corporation Limited


The National Small Industries Corporation Limited (NSIC) was established in 1955, for facilitating small enterprises.

It is involved in:

  • Bank credit facilitation for small industries
  • Export credit insurance
  • Raw Material Assistance
  • Export assistance
  • Bill Discounting Scheme
  • Organising Exhibitions (both domestic and international)
  • Providing Infomediary Service


Scenario Of Rural Industrialization: Popular Formal Schemes Of Khadi and Village Industries Commission (KVIC)


  • The objective of establishing the Khadi and Village Industries Commission (KVIC) was to provide financial and technical assistance to the implementing agencies whether they be the State KVI Boards, Registered Institutions, Cooperatives or individuals.
  • KVIC usually supports village industries through KVIBs and some of the KVIC directly aided institutions recognised by the KVIC. Besides financial, technological and marketing support, KVIC also has training and research centres to offer assistance for rural industries.
  • The popular schemes of the KVIC can be listed as follows:
    • PMEGP – Prime Minister’s Employment Generation Programme
    • PCBI – Schemes under Polymer and Chemical based industries
    • MBI – Schemes under Mineral based Industries
    • SFURTI – Scheme of Fund for Regeneration of Traditional Industries
    • HMPF – Scheme for Handmade Paper and Fibre Industry
    • REGP – Rural Employment Generation Programme
    • PRODIP – Product Development, Design Intervention Promotion Package
    • ISEC – Interest Subsidy Eligibility Certification
    • Publicity – Support for conducting thematic seminars, school-level competitions and debates.


Scenario Of Rural Industrialization: Popular New Schemes Of Khadi and Village Industries Commission (KVIC)


Ministry of MSME, through KVIC, is implementing the following schemes/sub-schemes/components for promotion of the Khadi sector:

  1. Under Interest Subsidy Eligibility Certificate (ISEC) scheme, credit at the concessional rate of interest of 4% per annum is given for capital expenditure as well as for working capital as per the requirement of Khadi Institutions.
  2. Modified Market Development Assistance (MMDA) scheme, aims at market segmentation of Khadi products for effective pricing, strengthening marketing network to participate/ organized domestic/international exhibitions, creation of market demand quality products, extending incentives to the artisans/karyakartas infrastructure development etc.
  3. ‘Workshed Scheme for Khadi Artisans’ scheme aims to provide sufficient space and congenial environment for smooth and fatigue free working to the Khadi artisans in which KVIC is providing an amount of Rs. 60,000 and Rs. 40,000 per artisan for construction of individual and group Worksheds, respectively.
  4. KVIC is providing funds for the implementation of various projects for technology up gradation under ‘S&T programme’.


Scenario Of Rural Industrialization: History of Rural Industrialisation


  • Rural industrialisation has been a high-priority area for policymakers since independence.
  • The focus has been on small-scale and cottage industries as they were considered to be an instrument to facilitate the transition from the traditional and labour-intensive agrarian economy to an industrialised economy and as a platform for equitable distribution of national income. This was highlighted in the Industrial Policy Resolution (IPR) of 1948.

Karve Committee Report

  • The Planning Commission of India devised the “Report of the Village and Small-Scale Industries (Second Five-year Plan) Committee” which is famously called the Karve Committee Report in the year 1955. The report highlighted the challenges related to the over-centralisation of economic activities and moving from safeguarding small-scale industries to their development.

Industrial Policy Resolution 1956

  • The Industrial Policy Resolution 1956 is said to be a milestone in the development of agro and rural industries.
  • The IPR 1956 said that measures of safeguarding small-scale industries will continue to be taken, whenever necessary, but the main aim of the State policy will be to ensure that the decentralised sector acquires sufficient vitality to be self-supporting and its development is integrated with that of large-scale industry.
  •  The Third Five-Year Plan focused on positive assistance like improvement of skill, providing technical advice, better equipment and credit, to progressively reduce the role of subsidies, sales rebates, and sheltered markets.
  • The Fourth Five-Year Plan mainly focused on providing a combination of incentives and disincentives for ensuring the decentralisation of small industries.

Industrial Policy Resolution 1977

  • The new IPR of 1977 was promulgated which emphasised the importance of small-scale and cottage industries and provided them with the required thrust. It further said that “whatever can be produced by small and cottage industries must only be so produced”.
  • The IPR 1977 classified the small sector into three broad categories:
    • Cottage and Household industries which provide self-employment on a large scale.
    • Small-scale industries incorporating investment in industrial units in plant and machinery of up to Rs. 1 lakh and situated in towns with a population of less than 50,000 according to the 1971 Census.
    • Small-scale industries comprising industrial units with an investment of up to Rs. 10 lakh and in the case of ancillary units with an investment of up to Rs. 15 lakh.
  • The following IPR of 1980 and 1990 increased these investment limits to support the growth of small-scale industries.

Small Industries Development Bank of India (SIDBI)

  • Small Industries Development Bank of India (SIDBI) was set up in 1990 to ensure an adequate and timely supply of credit for small-scale industries.
  • There has been a monumental shift in the rural industries after the introduction of the Micro, Small and Medium Enterprises Development (MSMED) Act of 2006.

Scenario Of Rural Industrialization: Key Government schemes to promote rural industries


Prime Minister’s Employment Generation Programme (PMEGP)

  • It is a credit-linked subsidy scheme, for establishing new micro-enterprises and generating job opportunities in rural and urban areas of the country through the Khadi and Village Industries Commission (KVlC), State Khadi and Village Industries Board (KVIB) and District Industries Centres (DIC).
  • Since its inception in 2008, over 3.50 lakh micro enterprises have been established and over 29 lakh jobs have been created from such units.

Scheme of Fund for Regeneration Traditional Industries (SFURTI)

  • The scheme was launched in 2005-06 for making Traditional Industries more productive and competitive by organising the traditional industries and artisans into clusters.
    • Over 26 clusters have been granted final approval with a total project cost of Rs.72 crores benefiting around 25,000 artisans.
    • Read more about the SFURTI scheme in PIB dated Feb 22, 2021.

A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE)

  • It was launched in 2015 to promote Innovation and Rural Entrepreneurship through rural Livelihood Business Incubator (LBI), Technology Business Incubator (TBJ) and Funds for start-up creation in the agro-based industry.

Stand Up India

  • This scheme provides composite loans between Rs.10 lakh to Rs. 100 lakhs for creating greenfield enterprises in the non-farm sector by SC/ST and women entrepreneurs.

Atal Community Innovation Centres (ACIC)

  • ACICs have been set up to nurture high growth and employment-generating start-ups across the country and are envisaged to serve the underserved areas of the country.
  • ACIC also operates a Community Innovator Fellowship (CIF) Programme in collaboration with UNDP India to facilitate knowledge building and provide infrastructure support essential for the entrepreneurship journey of aspiring community innovators.

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