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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.
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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 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.
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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 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.
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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 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.
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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 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.
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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.
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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.
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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 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
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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
Officer2. Supply of Iron Box
Eligibility - For Salavaithozhilalars belonging to
BC/MBC/DNCs are eligible. The family annual income
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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 DenotifiedCommunities, 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 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
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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 theconcerned 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.