This article provides a scientific and economic analysis of the priority areas of entrepreneurship and crafts development in mahallas in the conditions of Uzbekistan and practical recommendations aimed at supporting them. The study substantiates the role of the mahalla institution in regional economic development, its importance in ensuring employment and effective use of local resources. Special attention is also paid to improving the business environment, integrating handicraft activities with market infrastructure, improving financial support mechanisms, and developing human capital. The conclusions and proposals presented in the article serve the sustainable development of small businesses and crafts at the local level and are of practical importance in the activities of state and mahalla management bodies.

This article examines the procedure for using the funds of the fund for solving the socio-economic problems of the mahalla, the specific features of the sources of funds of this fund, and the system of important economic and financial indicators used to assess the effective formation of the fund. Based on the developed methodological approaches, the estimated income of the fund for solving the socio-economic problems of the “Bekat” mahalla of the Boyovut district of the Syrdarya region for 2025 is analyzed.

The article highlights the reduction in the personal participation of citizens in the national system of public services in the “mahalla” system based on the principles of “3 steps”, “adapted for the user” determining the demand for public services.  Defining requirements for the provision of public services, setting standards, forming a list of public services, highlights the organizational and economic mechanism that allows establishing methods for the provision of public services, and the process of organizing the provision of public services in the “mahalla” system. Proposed based on the organizational and economic mechanism, the main directions of the provision of public services in the “mahalla”.