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 longterm 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.

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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 a significant 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 setting up of industries. The terms and conditions may vary. Some states dont charge rent in the initial years, while some allow payment in installments.

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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 water charges 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.

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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.

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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 imbalances in 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 such facilities.

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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 of Government 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.

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Need for Fiscal Incentives To remove regional disparities in development. To promote entrepreneurship & strengthen the entrepreneurial base in the economy. To provide competitive strength, survival & growth To generate more employment & remove under-employment& unemployment.

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Problems of Fiscal Incentives The analyst argue that result into useless taxgive 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.

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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 Boxes and 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

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Backward Area Benefits

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 Officer 2. Supply of Iron Box Eligibility - For Salavaithozhilalars belonging to BC/MBC/DNCs are eligible. The family annual income

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Backward Area Benefits

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

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Backward Area Benefits

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 Denotified Communities, Chennai-5. 19 3. Commissioner of Minorities Welfare, Chennai 4. District Backward Classes and Minorities Welfare Officers in districts concerned

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Backward Area Benefits

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 and Rs.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

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Backward Area Benefits

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 the concerned district. 6. Grants to perform Funeral Rites Eligibility : The annual income should not exceed

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Backward Area Benefits 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.