SIDC: States Industrial Development Corporations

The full form of SIDC or SIDCs is State Industrial Development Corporations. It was first established in 1995 under the Companies Act, 1956. They are state-owned government corporations that engage in the development and promotion of medium and large industries. SIDCs aim to develop industrial infrastructure such as industrial parks and industrial estates along with providing financial assistance. They set up industrial projects either in joint sector collaboration with private entrepreneurs or on their own. They also set up such projects as wholly-owned subsidiaries. They provide loans to several industrial units in medium and large sectors at an interest rate that ranges from 13.5% to 17% according to the size of the loan. 

Some of the SIDCs are:-

•  Jammu and Kashmir State Industrial Development Corporation

• Tamil Nadu State Industrial Development Corporation

• Kerala State Industrial Development Corporation

Objectives of SIDC 

The main objectives of SIDC are as follows:-

• SIDC aims to promote micro, small and medium enterprises.

• It aids in the establishment of entrepreneurship and skill development.

• It helps in facilitating industrial infrastructure development.

• It aims at providing publicity and marketing support to industries.

Functions of SIDC

The main functions of SIDC are:-

• SIDCs act as an instrument in expediting industrialization in the states of India in which they are present.

• SIDCs issue loans, subscriptions of shares, guarantees to various companies belonging to different industries.

• SIDCs organise various promotional programs like entrepreneurial training, project identification, etc.

• It provides financial assistance in the form of loans or subscriptions to debentures and shares, guarantees, etc. 

• SIDCs procure scarce raw materials from the domestic market and international market and make them available to needy small scale industries as per their requirements. 

• SIDCs take up various schemes to provide the various industrial units with efficient marketing assistance. SIDCs participate in tenders floated by the state government departments.

• To obtain orders and distribute them among various small scale units, SIDCs make advance payments.

• It helps in solving the working capital problems of the various industrial units.

• The government departments often delay payments when goods are supplied to them by the industrial units. Therefore, to avoid such delays, SIDCs discounts the bills drawn on government departments. Hence, they ensure that 80% of the bill value is paid to the supplier units.

• SIDCs have developed websites so that the products manufactured by the industrial units are displayed in foreign markets. It provides export marketing assistance and helps in procuring export orders.

• It helps small scale units to take part in the international trade fair so that the products are displayed there.

• SIDCs also promote industrial units run by women entrepreneurs.

• SIDCs help in setting up skill development centres where workers are trained in various skills and industrial activities. This is to ensure the supply of skilled labourers to various small scale industries.   

Did you know?

There are currently 28 State industrial development Corporations in India. It has been established by state governments of each state. 11 out of 28 SIDCs in the country function as State Financial Corporations. They are termed as Twin functions of IDCs.  

Solved Examples 

1. When was SIDCs First Established?

1. 1997

2. 1998

3. 1995

4. 1994

Ans: (c) 1995

2. Under Which act SIDCs was Established?

1. Companies Act 1956

2. Companies Act 2013

3. SIDCs Act 1956

4. None of the above

Ans: (a) Companies Act 1956

About the Council of State Industrial Development and Investment Corporations of India (COSIDICI)

The Council of State Industrial Development and Investment Corporations of India (COSIDICI) is a national federation that was established in 1976. It oversees and manages the various State Financial Corporations (SFCs), the State Industrial Development Corporations (SIDCs) and the State Infrastructure Development Corporations. As of 1999, the COSIDICI has 56 state-level institutions holding membership. These 56 institutions are made up of 18 SFCs, 28 SIDCs, and 10 State Infrastructure Development Corporations. 

• State Financial Corporations (SFCs) are a set of corporations that were established under the State Financial Corporations Act of 1951. These are public financial institutions set up at the state level.

• State Industrial Development Corporations (SIDCs) are a set of institutions that assist small and medium businesses in the form of development, funding, and promotion

• State Infrastructure Development Corporations are, as the name suggests, responsible for the development of state Infrastructure

The COSIDICI has several aims, all of them connected to the development and promotion of small and medium businesses. The COSIDICI's main goal is to promote an economy in which small businesses can hold their own against large and multinational companies that have more money and influence.

There are four main functions of the COSIDICI, as explained on their website. These are:

• Allotting loans to small and medium businesses based on soft terms

• Providing technical assistance for project reports

• Allotting industrial sheds or plots in one of the industrial parks developed by the various states

• Providing special incentives as offered by the respective State under which the business falls

As you can see in the above functions, the COSIDICI only assists in setting up your small business. There is no interference in the running of the business, nor any unexplained fees for the business owner or investors to pay. You can find out more about COSIDICI by going to their website.

How to Study SIDC?

Studying any new subject can sometimes be a bit tough, however, with the right resources and the right study schedule, you can easily ace your exams.

When creating your study schedule, it is important to remember that the key to studying well is studying consistently rather than studying a lot. In simpler words, it's more efficient to study for a couple of hours every day for a few months than studying 12 hours a day for two weeks. This allows you enough time to sleep and eat properly while also taking small breaks.

The other important things that you need while studying are high-quality study materials. These can be found for free on Vedantu. This page, as an example, has a lot of material on the SIDC, such as its history, work, and importance in business. This is a relatively small topic in the commerce curriculum, however, it is still important to study it thoroughly. For a detailed list of topics included in the commerce curriculum for class 11, you can here on Vedantu.