What are the incentives provided by the government for small scale business?

CBSE Class 11 CBSE Class 11 Business Studies
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1

What are the incentives provided by the government for small scale business ?
OR
Explain any six incentives being provided by central/state government for setting up small the business units in backward areas.

2

The incentives provided by the government are as follows:

  1. Land.: Developed Tots are offered by every state for establishing industries.
  2. Power: Some states supply power at a concessional rate of 50%, while some give it free of cost during the initial years.
  3. Water : Water is either supplied at 50% concession or is totally free for a period of 5 years.
  4. Finance : Small business units are offered loans at a very low rate of interest i.e. 10 to 15% subsidy is given for building capital assets.
  5. Sales tax: Exemption from sales tax is extended by some states for a period of 5 years while all muon territories provide full exemption from sales tax. It is also known as Value Added Tax (VAT).
  6. Raw material: Units located in backward areas get preferential treatment in the matter of allotment of scarce raw materials like cement, iron, steel, etc.