govt support new enterprise

8/7/2019 Govt Support New Enterprise

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INTRODUCTION

In the post independence era govt. support

the Enterpenureship and the new

enterprise to solve the measure problems

of poverty and unemployment face by the

Indian economy, the development of SSI

was considered essential because of its

being labor intensive and having

implications for equity, flexibility,

capability to contribute to

decentralization, optimum use of local

resources and talents etc.



GOVT SUPPORT NEW ENTERPRISE THROUGH TWO WAYS:

INCENTIVES

SUBSIDIES.

INCENTIVES- The term incentives includes concessions and

bounties.A THING THAT ENCOURAGE SOMEBODY TO DO SOMETHINGµ

Bounty denotes bonus or financial benefits.

Concession refers to reduction in price for a particular categories of

people.

SUBSIDIES- It denotes a single lump sum which is given by govt.

to industry.



They act as a motivational force.

Encourage Entrepreneur to start industry in backward areas

By providing subsidies and incentives govt. can:

Develop more new Entrepreneur which lead toEntrepreneur development.

Reduce overall problem of small scale

Entrepreneurs.

Increase the ability of Entrepreneurs to face

competition successfully

Bring industrial development uniformly in all regions.



NEED FOR INCENTIVES

To remove regional Disparities in

Development

To strengthen and expand the

entrepreneurial base.

To provide competitive, strength, Survival

and growth.

Ensure employment opportunities.



SCEMES FOR INCENTIVES & SUBSIDIES:

1. Credit Link Capital Subsidy.

2. Capital Investment Subsidy.

3. Transport Subsidy.

4. Collateral Free and Third Party Guarantee

Free Loans

5. Power Subsidy.



1. Credit Link Capital Subsidy.

This subsidy is given to upgrade technology of SSI·s in

selected product and strengthen the units in identified

sector to face competition.

14 selected sectors:

1. LEATHER

2. FOOTWEAR

3. GARMENTS

4. FOOD PROCESSING

5. I.T

6. DRUGS7. PHARMACEUTICALS

8. AUTO COMPONENTS ETC.

12% On loan & advances to SSI by commercial banks.



2. Capital Investment Subsidy.

Subsidy for NORTH-EASTEN region.

Under this scheme subsidy at rate of 15% of investment in

plant and machinery is payable to:

1. To new Industry.2. Industry located in growth centers.

Subsidy given by state govt.



3. Transport Subsidy.

To promote industry in hilly areas:

Available in states of

1. HIMACHAL PARDESH

2. J & K

3. SIKKIM

4. BENGAL

5. U.P (8 DISTRIC)

6. NAINTAL

7. DEHRADUN etc.

Subsidy ranging from 50% - 90% is admissible on transport

costs incurred on raw material and finished goods.



4. Collateral Free and Third Party Guarantee Free

Loans

The GOI in association with SIDBI sep up a credit

guarantee fund trust for small industries. This scheme

provides a guarantee to cover the eligible lending

institution (commercial bank) in respect of collateral free

and third party guarantee.

IT and Software sector.



5. Power Subsidy

It is not uniform in all states.

1. In Kerala, new units are exempted from electricity.

2. In J&K, small units get 100% subsidy for new DG sets of

10 KWs ² 1000 KWs capacity.

3. In Bihar small units gets subsidy at rate of 15 paisa per

unit from date of production.

4. In Assam, units get annual power subsidy upto 1 MW-@ 50%, limited to 0.5 million.



I ti f l t f I t i

: i t i t.

Concessional inance- ICICI,I CI,I I- . instead of

nderwriting commission of .

Capital Investment sidy: tright grant of -

on capital invested.



Subsidized Consultancy services to small

entrepreneur:

Small entrepreneurs proposing to start up rural,

cottage, tiny or small scale units can get consultancy

ser ices from (TCO·s) technical consultancy

organizations. They have to pay only 20% f ee.



Subsidy for market studies: New enterprises locally

based or NRI·s entering medium or medium large

industry first time undertaken by TCO at cheaper cost.

Special facilities for import raw material:

Industry set in backward area, diploma holder in

prof essional subjects, ex-serviceman belonging to SC,BC.

Maximum value of license shall be 5 lakh instead of 3

lakh.

govt support new enterprise

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