Government schemes and incentives for promotion of
entrepreneurship
The various important incentives and subsidies available to
the small scale industrial units are listed below:
· Capital Investment Subsidy Scheme Offered by Central
Government
One of the policy measures designed for the development of backward areas is provision of capital investment subsidy. Under this scheme , a subsidy will be granted on the capital investment. A grant of 10% of the capital invested in industrial units is available in the areas notified y the Central and State
Governments.
· Sales Tax Exemptions
New small scale units located in places outside some specified distance from the cities, are eligible to get sales tax concessions and exemption. Interest Free Sales Tax Loan is given for the first five years of commencement of production, which is recoverable in 3 equal annual instalments from 6th year
onwards. Some products like life saving drugs and essential chemicals are exempted from sales tax. In order to boost small scale sector, the Government has reduced sales tax on different items, as package of incentive.
· Provision of Seed Capital
The financial institutions provide a sum towards marginal money to obtain loan. The initial capital helps the poor but deserving entrepreneurs to enter into business and industry.
· Provision of Concessional Power and Water
New units started in the notified backward areas are eligible to get power as well as water at concessional rates in order to have uninterrupted production.
· Purchase of raw materials
Scarce raw materials like iron & steel, coke, match wax, potassium chloride, caustic soda, fatty acids etc. are produced and supplied to SSI Units.
·Allotment of Industrial Sheds
Work shed is the basic infrastructure required for an industry. The Government allots work sheds to the entrepreneurs. At present, in our country, there are mainly two agencies offering this facility to the
entrepreneurs. They are :
(i) Directorate of Industry and Commerce.
(ii) Small Industries Development Corporation (SIDCO).
· Export Incentives and Subsidies
With a view to boost the export market and earn foreign exchange, the Government is granting subsidies to the units exporting goods.
· Subsidy for Power Generators
In many states, the industrial units suffer from power shortages, power shedding and fluctuation problems. Hence, the government is giving loans to purchase “Generators” to solve the power problems. The entrepreneurs can obtain this subsidy on easy terms and install a generator in their units.
· Special Incentives to Women Entrepreneurs
Special incentives are offered to Women entrepreneurs who would like to join in the manufacturing line. Government agencies as well as private voluntary agencies also do provide various assistances including vocational training to women.
· Exemption from Stamp Duty
Government example the entrepreneurs from paying stamp duty for the registration of plots allotted to them by the State-owned financial institutions.
·Special Concessions to Scheduled Caste and Scheduled Tribe Entrepreneurs
As per current provisions, SC/ST entrepreneurs need not pay 25% of the margin money requirements. They have to pay just 10% as margin money for availing the financial assistance. There is also reduction in the rate of interest to the extent of 1.5% provided the units are started in the notified backward
areas.
· Preferential Purchase from SSI Units
The Government of India had reserved more than 900 items for the exclusive production of SSI units in accordance with Industrial Policy Resolutions. In the interest of growth of small scale units, Government departments make preferential purchases from this sector. The SSI units are also given price preference up to a maximum of 15% in the case of items purchase from both small and large scale units.
· Capital Investment Subsidy Scheme Offered by Central
Government
One of the policy measures designed for the development of backward areas is provision of capital investment subsidy. Under this scheme , a subsidy will be granted on the capital investment. A grant of 10% of the capital invested in industrial units is available in the areas notified y the Central and State
Governments.
· Sales Tax Exemptions
New small scale units located in places outside some specified distance from the cities, are eligible to get sales tax concessions and exemption. Interest Free Sales Tax Loan is given for the first five years of commencement of production, which is recoverable in 3 equal annual instalments from 6th year
onwards. Some products like life saving drugs and essential chemicals are exempted from sales tax. In order to boost small scale sector, the Government has reduced sales tax on different items, as package of incentive.
· Provision of Seed Capital
The financial institutions provide a sum towards marginal money to obtain loan. The initial capital helps the poor but deserving entrepreneurs to enter into business and industry.
· Provision of Concessional Power and Water
New units started in the notified backward areas are eligible to get power as well as water at concessional rates in order to have uninterrupted production.
· Purchase of raw materials
Scarce raw materials like iron & steel, coke, match wax, potassium chloride, caustic soda, fatty acids etc. are produced and supplied to SSI Units.
·Allotment of Industrial Sheds
Work shed is the basic infrastructure required for an industry. The Government allots work sheds to the entrepreneurs. At present, in our country, there are mainly two agencies offering this facility to the
entrepreneurs. They are :
(i) Directorate of Industry and Commerce.
(ii) Small Industries Development Corporation (SIDCO).
· Export Incentives and Subsidies
With a view to boost the export market and earn foreign exchange, the Government is granting subsidies to the units exporting goods.
· Subsidy for Power Generators
In many states, the industrial units suffer from power shortages, power shedding and fluctuation problems. Hence, the government is giving loans to purchase “Generators” to solve the power problems. The entrepreneurs can obtain this subsidy on easy terms and install a generator in their units.
· Special Incentives to Women Entrepreneurs
Special incentives are offered to Women entrepreneurs who would like to join in the manufacturing line. Government agencies as well as private voluntary agencies also do provide various assistances including vocational training to women.
· Exemption from Stamp Duty
Government example the entrepreneurs from paying stamp duty for the registration of plots allotted to them by the State-owned financial institutions.
·Special Concessions to Scheduled Caste and Scheduled Tribe Entrepreneurs
As per current provisions, SC/ST entrepreneurs need not pay 25% of the margin money requirements. They have to pay just 10% as margin money for availing the financial assistance. There is also reduction in the rate of interest to the extent of 1.5% provided the units are started in the notified backward
areas.
· Preferential Purchase from SSI Units
The Government of India had reserved more than 900 items for the exclusive production of SSI units in accordance with Industrial Policy Resolutions. In the interest of growth of small scale units, Government departments make preferential purchases from this sector. The SSI units are also given price preference up to a maximum of 15% in the case of items purchase from both small and large scale units.
