Government Support to Entrepreneurs
Yearly Development for Support of Entrepreneurship in India
|Year |Development | |1948 |Industrial Policy Resolution Act was made under which small scale industries were made to be suited for better | | |utilization of local resources and achievement of ‘local self-sufficiency’. | |1956 |Government decided to initiate measures to build the competitive strength of small and village industries. Also | | |resolution underlined the role that the SSI sector could play in providing employment opportunities, mobilizing | | |local skills and capital resources and in the integrating process with large industrial sector. | |1977 |Industrial Policy Statement, stressed upon wider dispersal of cottage and small industries in the rural areas and| | |small towns. | |1980 |Ancillarisation and creation of nucleus plants for the growth of the sector. | |1990 |Emphasized the steps for enhancing the contribution of the SSI sector in overall exports, employment generation, | | |and dispersal of industries in rural areas. | |1991 |Thrust on promotion and strengthening of small, tiny and village industries. |
The highlights of the Small Scale Industries Policy of August 1991 are as follows:
• The investment limit for the tiny sector was raised to Rs. 5 lakhs from Rs. 2 lakhs. This limit has now been raised to Rs. 25 lakhs. • Here after irrespective of their location would be recognized as small scale industries. • The small Industries Development Organization (SIDO) has been recognized as the nodal agency to support the small scale industries, export promotion. • An export development centre would be set up in SIDO to serve the small scale units through its network of field officers to further augment export activities of the sector. • A technology development cel1 (TDC) will be set up in SIDO which could provide technology inputs to improve quality and competitiveness of product of small scale sector. • The scheme for the handloom sector, which contributed 30% of the total textile production in the country, would be redesigned keeping in view the local and regional needs. It would be the policy of the Government to promote handloom to sustain employment in rural areas and to improve quality of life for handloom weavers. • The National Small Industries Corporation (NSIC) would concentrate on marketing of mass, consumption items under common brand name and organizational links between NSIC and SSIDCs would be established. • The scope of the national equity fund scheme will be widened to cover projects upto Rs. 10 lakhs for Equity Support (Upto 15 per cent). • The Single Window loan scheme has also been enlarged to cover Projects upto Rs. 20 lakhs with working capital margin upto Rs. 10 lakhs. • Small Scale units can have equity support to the extent of 24% of the total investment from the medium and large scale industries, Public Undertakings, NRIs or foreign investment.
Incentives and Subsidy
The term “incentive” includes concessions and bounties. ‘Subsidy’ denotes a single lump sum which is given by a government to industry. It is granted to an industry which is considered essential in the national interest. The term ‘bounty’ denotes bonus or financial benefit which is given by a government to an industry to help it compete with other units in a nation or in a foreign market. It is given in...