For starters, (both ways - start ups & who are unaware of incentive schemes) Government of India and State Government both have incentive schemes for businesses. The starting 3-5 years are very tough for any start up and for that matter entrepreneur because the cash flow is highly restricted. Since things are just starting, there are lots of investments (I prefer to use term investments for expenses). First a place has to be secured, machines have to be ordered and advances for machines have to be paid if they are special purpose machines and made as per order. The period in between goes without any cash flow because it is just set up time. Then, there is some period when revenues are either very low or nil because things have to be set.
Considering this, government has certain incentive schemes for MSMEs. They are trade wise - like special concession for textile field or there might be region wise - Himachal Pradesh & Kutch region after earthquake had given tax holidays for 5-10 years, so that trade might become a norm in those regions. Each state also has an incentive scheme. Though we should not depend on it, as it is better to concentrate our energies on something productive, this incentive should not be neglected. Generally, these incentives are given to regions where growth is minimum. For example, Maharashtra has Industrial areas MIDC which are divided into different zones A, B, C & D as per development. If you install a plant in these regions, then it is possible that you get lots of incentives. You can get incentive/subsidy/rebate on stamp duty, on interest on term loan, VAT, Electricity Duty.
You might think that it will be difficult to follow up with such government departments. But for this work, there are separate agencies who work for your behalf and take money after the work. You can surely think of getting on that route. Especially, for zones C & D the rebates are up to 80 %.
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