Question

Long answer type questions.

Explain any two schemes provided for upgradation of small business in backward and hilly areas.

Answer 1

Among the major incentives offered by the government for upgrading small businesses in rural and backward areas, the following are a few:

1. Integrated Infrastructural Development (IID) centres- The Indian government formulated a scheme to set up integrated industrial development centres for the development of the rural and backward areas of the country. This scheme was undertaken since the 8^th five year plan and targeted to set up a minimum of 50 IID centres in India. During the 9^th five year plan, the government decided to provide financial aid such that for any investment of Rs 5 crores, the central government granted upto Rs. 2 crores (in case of north east regions, the grant was upto 4 crores).
2. Package for tiny sector units- The tiny sector units form 95% of the total small-scale businesses in India. These tiny units are defined as the ones whose investment in plants and machinery adds upto 25lacs. Under the package, facilities and incentives were given to the small industries in a way that 60% of the credit flow was reserved for the tiny units and 40% was reserved for other small businesses. Under the tiny sector units, 40% share was given to tiny units having investment in plants and machinery upto 5 lacs and 20% share was assigned to tiny units having investment in plants and machinery upto 25 lacs.