Earning capacity of local households gradually increases with the help of small domestic businesses, particularly in semi-urban and rural regions. This study based on significance of small domestic businesses on local households with reference to Eastern India. This study examine how earing capacity of local households increases at the same time, how it helps in generating employment, and living standards.  Two types of data are collected to analysis this study. Primary data were collected through questionnaires and personal interviews with the local entrepreneurs, while secondary data were collected from government reports, journals, and official records. This study concludes that small domestic businesses play a vital role in improving quality of local households as well as promote self-reliance among households. Nevertheless, there are certain challenges notably lack of financial support, formal training, marketing knowledge continue to hinder their full potential. This paper suggests that proper skill enhancement training, financial support, marketing accessibility will help in increasing economic stability among local households in the Eastern India region.