SIDC - States Industrial Development Corporation

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What is SIDC?

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

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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 in 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 it available to the 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 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 the 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 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

Answer- (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

Answer- (a) Companies Act 1956

FAQ (Frequently Asked Questions)

Q1. What is COSIDICI?

Ans. The Council Of State Industrial Development and Investment Corporations of India(COSIDICI) was established in 1976 and comprise the State Financial Corporations(SFCs), State Infrastructure Development Corporation and State Industrial Development Corporations(SIDCs). It aids in setting up industrial units in the small, medium and large/joint sector. It assists the industrial units through its network 56 affiliated State Industrial Development Corporations (SIDCs) and Investment Corporations. The functions of COSIDICI are:-

  • COSIDICI provides loans on soft terms.

  • They help in providing industrial sheds in the industrial estates developed by the state-level corporation.

  • They provide technical assistance to the industrial units for the preparation of project reports.

  • They make available special incentives to set up industrial units that are provided by the respective state governments.

Q2. What is a Financial Institution? Explain the Types of Financial Institutions.

Ans. Financial Institution- A company that deals with the monetary and financial transactions such as loans, investments, deposits and currency exchange. It is an integral part of every economy and can vary by scope, size and geography. 

Financial institutions can be categorized into three broad categories:-

  • Depository Institutions 

  • Nondepository Institutions

  • Investment Institutions

1. Depository Institutions - Depository institutions accept and manage deposits. They make loans and include credit unions, thrift institutions and commercial banks.   

2. Non- depository institutions - Non-depository are also known as contractual institutions including insurance companies, pension funds and finance companies.

3. Investment Institutions - Investment Institutions encompasses investment banks, underwriters and brokerage firms.