Rural Industries Project Programme

Benefits of Rural Industries Project Programme

Benefits of Rural Industries Project Programme

In addition, 111 districts in the country have been covered under the centrally sponsored Rural Industries Project Programme. Small-scale units set up in these areas get other special concessions and facilities. The various benefits are enumerated below.

  1. An outright subsidy of 15% on the fixed capital investment up to a maximum of Rs. 15 lakhs is admissible to new units being set up in backward areas.
  2. Allotment of factory or factory sheds in industrial estates/ areas and industrially development colonies on easy terms.
  3. Interest-free loans in lieu of inter-state Sales tax paid/payable by SSI units are available up to 7 years, provided the loan in a particular year will not exceed 8% of the capital investment.
  4. Loans and advances to SSI units under the State Aid to Industries Act and Rules framed there under, for the construction of factory buildings, purchase of machinery and equipment and working capital on easy terms.
  5. The State Financial Corporations grant loans for acquisition of fixed assets up to Rs. 30 lakhs in the case of limited companies and registered co-operative societies and up to Rs. 15 lakhs for others at liberalized margins and rates of interest, and this is done over a longer span of repayment and moratorium period.
  6. The Central/State Government directly or through its subsidiary concern-the State Industrial Development Corporation -under writes or participates in the preference shares of public limited companies on a selective basis for setting up medium and large industrial units. The State Government also considers cases for setting up of joint ventures with the private sector.
  7. The SSI units in the backward areas and other industries with a capital investment in plant and machinery up to Rs. 1 lakh are relieved from the following taxation in some States:
  • New units established in the districts are completely exempted from the payment of electricity duty up to a period of 7 years.
  • New units exempted from property tax for a period of 5 years.
  • Industrial units set up within the municipal limits are exempted from Governments octroi on capital equipment and building materials subject to a maximum period of 3 years from the date of regular registration.
  1. Provision of essential, controlled raw materials to the SSI units on priority and at very liberal terms.
  2. State Governments have set up independent testing laboratories on behalf of the Indian Standards Institution, the Export Inspection Council, the Department of Defence, Government of India and various other government organizations for making industrial products of good quality.
  3. In order to provide some important and sophisticated common facilities, a network of industrial development centres, heat treatment centres and common facility workshops have been set up in the States to equip the SSI units with modern techniques and process of manufacturing.

Special incentives, in the form of transport subsidy, to compensate partially for the higher transport cost of established industries, in hilly backward areas, is also being provided by the Union Government.

As per the Import-Export Policy of 1983-84, the small scale units will be permitted to set up consortia to organize the-sales of their own products abroad. Similarly, a co-operative society of small units will also be permitted to do so. Such consortium or a co-operative society of small scale units will be eligible for grant of an Export House Certificate on the following basis:

  1. The applicant is a corporate body or a partnership firm or a co-operative society and is registered as an exporter;
  2. All the members of the applicant consortium are small or cottage units;
  3. The minimum limit prescribed for selected products for grant of a certificate will be 50 lakhs (the minimum exports may be either in the immediately preceding years or the annual average of the three years of the base period).

For the purpose of granting the first house certificate to the consortium, the exports made by its members will be taken into account, if otherwise acceptable. Thereafter, for the purpose of renewal, the exports made in the name of the consortium alone will be acceptable.

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