Some of the common incentives provided by the government far industries in backward and hilly areas are as fallows
(i) Land Every state offers developed plots for setting up of industries. The terms and
conditions may vary. Some states don’t charge rent in the initial years, while some allow ' '
payment in instalments.
(ii) Power Power is supplied at a concessional rate of 50 %, while some states exempt such units from payment in the initial years.
(iii) Water Water is supplied on no-profit, no-loss basis or with 50 % concession or exemption from water charges for a period of 5 years.
(iv) Sales Tax In all union territories, industries are exempted from sales tax, while some states extend exemption for 5 years period.
(v) Octroi Most states have abolished octroi.
(vi) 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.
(vii) Finance Subsidy of 10-15 % is given for building capital assets. Loans are also offered at concessional rates.
(viii) Marketing Assistance Government tries to solve their marketing problem by improving information and in order to provide guarantee for sale of goods.
(ix) Tax Holiday Exemption from paying taxes for 5 or 10 years is given to industries established in backward, hilly and tribal areas.