ED_Unit _9

8/3/2019 ED_Unit _9

1/15

Entrepreneurship Development_Unit_9

Special emphasis on the industrial development of

backward, tribal and hilly areas has been the

concern of the Government of India expressed in

all the Five Year Plans and industrial policy statements.

Realizing that backward areas development is a long-term process, several committees were appointed to

identify the criteria for identifying backward areas and

also to suggest schemes to take up the

balanced regional development. The implementation of

integrated rural development programme is one such

attempt made by the government to develop backward

areas.

8/3/2019 ED_Unit _9

2/15


The rural industries project programme initiated by the

Government of India was meant to develop small

business units in select rural areas. Though the

backward area development programmes varied from

state to state, they cumulatively represented asignificant package of incentives to attract industries in

backward areas. Some of the common incentives

offered to small scale industries in rural areas are:

Land Every state offers developed plots for settingup of industries. The terms and conditions may vary.

Some states dont charge rent in the initial

years, while some allow payment in installments.

8/3/2019 ED_Unit _9

3/15


Power- Electricity is supplied at a concessional rate

of 50 per cent, while some states exempt such units

from payment in the initial years.

Water is supplied on a no-profit, no-loss basis or

with 50 percent concession or exemption from watercharges for a period of 5 years.

Sales Tax- In all union territories, industries are

exempted from sales tax, while some states extend

exemption for 5 years period.

Raw materials- Units located in backward areas get

preferential treatment in the matter of allotment of

scarce raw materials like cement, iron and steel etc.

8/3/2019 ED_Unit _9

4/15


Finance - Subsidy of 10-15 per cent is given for

building capital assets. Loans are also offered at

concessional rates.

Industrial estates - Some states encourage setting up

of industrial estates in backward areas.Tax holiday - Exemption from paying taxes for 5 or 10

years is given to industries established in backward, hilly

and tribal areas.

8/3/2019 ED_Unit _9

5/15


To sum up, it may be stated that the small business

sector in India is getting the support of government

through various institutions in different forms for

different purposes. Despite special attention being

given to backward areas, it is observed that imbalancesin development are still there. There is a need to

develop infrastructural facilities in these areas, as no

amount of subsidies or concessions can overcome the

natural handicaps caused by a lack of suchfacilities.

8/3/2019 ED_Unit _9

6/15


The definition of an incentive can be very broad,

cover in virtually any assistance offered by a country to

investors, or it can be narrower, covering only specific

types of assistance to investors.

Fiscal incentives are a major component ofGovernment policy and are mostly used in combination

with other instruments such as grants or regulation.

The latter can help improve the effectiveness of fiscal

instruments or reduce their unwanted side effects.

8/3/2019 ED_Unit _9

7/15


Need for Fiscal Incentives

To remove regional disparities in

development.

To promote entrepreneurship & strengthenthe entrepreneurial base in the economy.

To provide competitive strength, survival &

growth To generate more employment & remove

under-employment& unemployment.

8/3/2019 ED_Unit _9

8/15


Problems of Fiscal Incentives

The analyst argue that result into useless tax-

give away schemes if they are not implemented

properly.

Favoritism & corruption have crept into the

administration machinery which has caused

much financial strain.

The real objective of providing incentives is

hardly achieved.

8/3/2019 ED_Unit _9

9/15


Backward Area Benefits

For the economic upliftment of the socially backward

people belonging to Backward Classes, Most Backward

Classes and Denotified Communities, schemes like

distribution of free Sewing Machines, free Iron Boxesand Job Oriented Training Schemes are provided by this

Department. Loans through schemes like TAMIL NADU

BACKWARD CLASSES ECONOMIC DEVELOPMENT LTD.

(TABCEDCO) and TAMCO are also given. The economic

standard of these people has been improving on

account of these schemes. 18

8/3/2019 ED_Unit _9

10/15



1.Supply of Sewing Machines

Eligibility- The parental income should not exceed

Rs.16000 in rural areas and Rs.24000/- in urban areas

should belong to BC/MBC/DNC.

Should have Tailoring Knowledge.

Contact Officer:- District Backward Classes Welfare

Officer2. Supply of Iron Box

Eligibility - For Salavaithozhilalars belonging to

BC/MBC/DNCs are eligible. The family annual income

8/3/2019 ED_Unit _9

11/15



should not exceed Rs.16000 in rural areas and Rs.24000

in urban areas.

Contact officer - District Backward Classes Welfare

Officer .

3. Job Oriented Training

Eligibility - The parental income should not exceed

Rs.50000/- per annum. Types of Training - Various types of job oriented

training courses i.e., Hotel Management and Catering

8/3/2019 ED_Unit _9

12/15



Technology courses, Computer training course,

Footwear & Leather goods manufacturing, Plastic

processing machine operator course, Heavy Vehicle

Training courses are implemented by this Department.Contact officer:-

1. Director of Backward Classes Welfare, Chennai-5.

2. Director of Most Backward Classes and DenotifiedCommunities, Chennai-5. 19

3. Commissioner of Minorities Welfare, Chennai

4. District Backward Classes and Minorities Welfare

Officers in districts concerned

8/3/2019 ED_Unit _9

13/15



4. Distribution of Free House Site Patta

Eligibility - People not in possession of residential

house or house site are eligible. The annual income

should not exceed Rs.16000 in rural areas andRs.24,000 in Urban areas.

Contact officer - District Backward Classes and

Minorities Welfare Officer 5. Grant-cum-loan scheme for small and medium

farmers - For the upliftment of small and medium

farmers of BC, MBC / DNC

8/3/2019 ED_Unit _9

14/15



Communities the Government have introduced a grant

cum loan scheme to create irrigation facilities.

Eligibility : Small and medium farmers

Amount : Loan upto Rs.1 lakh with a subsidy of 50%

subject to a maximum of Rs.50,000/-

Contact Officer : District Collector / District Backward

Classes an Minorities Welfare Officer of theconcerned district.

6. Grants to perform Funeral Rites

Eligibility : The annual income should not exceed

8/3/2019 ED_Unit _9

15/15



Rs.24,000; Should belong to MBC/DNC. A sum

of Rs.500 will be given to the poor MBC/DNC

family.

Contact officer- Local Body officials.

Documents

ED_Unit _9