This document discusses incentives and subsidies provided by governments to encourage entrepreneurship and industry. It defines incentives as motivational forces that encourage productivity and decision making, and subsidies as single amounts given to cover costs. The objectives of incentives are to promote entrepreneurship, achieve regional development, provide competitive strength, and motivate new ventures. Some strategies for incentives discussed include subsidies for purchasing equipment or land, training programs, industrial estates, loans, tax exemptions, and establishment grants. Overall the document outlines the meaning, need, objectives and strategies for governmental incentives and subsidies.
This document discusses incentives and subsidies provided by governments to encourage entrepreneurship and industry. It defines incentives as motivational forces that encourage productivity and decision making, and subsidies as single amounts given to cover costs. The objectives of incentives are to promote entrepreneurship, achieve regional development, provide competitive strength, and motivate new ventures. Some strategies for incentives discussed include subsidies for purchasing equipment or land, training programs, industrial estates, loans, tax exemptions, and establishment grants. Overall the document outlines the meaning, need, objectives and strategies for governmental incentives and subsidies.
This document discusses incentives and subsidies provided by governments to encourage entrepreneurship and industry. It defines incentives as motivational forces that encourage productivity and decision making, and subsidies as single amounts given to cover costs. The objectives of incentives are to promote entrepreneurship, achieve regional development, provide competitive strength, and motivate new ventures. Some strategies for incentives discussed include subsidies for purchasing equipment or land, training programs, industrial estates, loans, tax exemptions, and establishment grants. Overall the document outlines the meaning, need, objectives and strategies for governmental incentives and subsidies.
This document discusses incentives and subsidies provided by governments to encourage entrepreneurship and industry. It defines incentives as motivational forces that encourage productivity and decision making, and subsidies as single amounts given to cover costs. The objectives of incentives are to promote entrepreneurship, achieve regional development, provide competitive strength, and motivate new ventures. Some strategies for incentives discussed include subsidies for purchasing equipment or land, training programs, industrial estates, loans, tax exemptions, and establishment grants. Overall the document outlines the meaning, need, objectives and strategies for governmental incentives and subsidies.
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UNIT 5
INCENTIVES AND SUBSIDIES
MEANING OF INCENTIVES AND SUBSIDIES
MEANING Incentive means encouraging productivity. It is a motivational force which makes an entrepreneur take a right decision and act upon it. It includes concessions subsidies and bounties. Economic incentives both financial and nonfinancial inculcate decision and action.
SUBSIDIES Subsidy means a single amount which is given by government to an entrepreneur to cover the cost. The term bounty means a bonus or financial aid given to an industry to help it compete with other units in the country or in foreign market. The objective of both is to motivate an entrepreneur to set up a new venture in the interest of the nation and the society. NEED FOR INCENTIVES To correct regional imbalances in development- package of incentives and concessions is available in backward as well as developed districts, however what is lacking in backward districts is the overall envioronmental growth.Industrial policy uses incentives both to correct the market imperfections and to accelerate the process of industrialisation. To promote entrepreneurship by removing economic constraintsinadequate infrastructure,defeciency of supporting services such as (technical consultancy) form various economic constraints. NEED FOR INCENTIVES CONTD The various incentives help in solving these problems by way of industrial estates, concessional finance, transport subsidy. To provide competitive strength, survival and growthSome incentives are given for the first few years of establishment of the unit while a few of them are given for a long period of time. Reservation policy for SSI units is an example of incentive given to entrepreneurs.Price preference is another exampleof incentives given. OBJECTIVES OF INCENTIVES Entrepreneurship development Regional development Provide competitive strength Motivate people for new ventures Give stimulus to industry and business Motivate entrepreneurs to set up new ventures in view of interest of society and nation. STRATEGY OF INCENTIVES Subsidy for purchaseVaries from 50% to 100% of cost Entrepreneur TrainingFree with stipend for SC/ST and women entrepreneurs Developed landAt subsidised cost, on hire purchase, outright purchase basis Factory shedIn industrial estates MachineryOn hire purchase/lease Seed capital loanTo start industries
INCENTIVES STRATEGY CONTD.. Central investment subsidy at the rate of 25%varies from 10lakhs to 50lakhs
State investment subsidy10% To 15%
Tax exemptionExcise and sales tax exemption from stamp duty and concessional registration changes