Report of the Committee on Credit Facilities for Village & Small Industries Sector

Abstract

The Committee Report on Credit Facilities for the Village and Small Industries (VSI) sector evaluates existing institutional financing and proposes policy reforms to strengthen credit flow for small, decentralized, and cottage industries in India. Key findings highlight inadequate credit access, bureaucratic hurdles, and limited outreach of commercial banks, despite the sector’s substantial contribution to employment and manufacturing output. Recommendations include establishing dedicated apex institutions under IDBI and NABARD, specialized lending schemes, decentralized financing mechanisms, capacity building for bank personnel, and targeted funds for modernization, working capital, and marketing. The report underscores the need for coordinated institutional frameworks and diversified financing strategies to foster sustainable growth and enhance the economic potential of the VSI and small-scale industrial sectors.