Managerial Economics

2.  Transport Cost  Electricity duty
 Market exemption
 Energy  Concession to new
 Labour industry
 Climate  Concessional tariffs
 Power subsidy  Power intensive
 Government strategies
Industry
 Incentives for project
 Area
report
 External economies
 Land
 Water supply & Power

3.  Raw material oriented Industries will be closed to
sources of supply
For e.g. Tata Steel
 Depends upon type of raw material
◦ Perishable
For e.g. Fruit Canning industries
◦ Non perishable
For e.g. Pharmaceutical Industries

4.  Industries tends to be near their market
 Industries of perishable products
 Size of market is measured by its potential sales

5.  Source of energy
a) Coal Fields
b) Rivers
 Advancement in technology

6.  Most important factor of production which
influence the location of an industry
 Capital-intensive industries and Labour-intensive
Industries
 Three types of labour – Skilled, Semi-skilled and
Unskilled

7.  Plays very important role.
 Some industries require dry, some require humid.
 Cotton requires humid conditions.
 Textile industries require moist climate.

8.  Granted to small scale units on power consumption
 The quantum admissible is difference between the actual rate
per unit and
1. 3 paise/unit to max. 12 paise/unit if population is upto
20,000
2. 6 paise/unit to max. 9 paise/unit if population is 20,000 to
1,00,000
3. 9 paise/unit to max. 16 paise/unit if population is above
1,00,000

9.  Earlier conditions: Industries were set up as per the
wish of entrepreneurs
 Results: congestion of industries, migration of labor,
Problems of housing ,soaring prices , awkward growth
and regional imbalance etc

10.  Steps taken State Industrial Development corporation
 Identify backward industrial areas
 Offer a package of incentives
 Give notifications bout such incentives

11.  Divided area into –
a) Well Developed
b) Nearly developing
c) Developing
d) Underdeveloped
e) Undeveloped
 General type of incentives to industries
 Especial incentives or concession given in addition

12. Areas
 Special incentives :
a) Cash subsidies
b) Sales taxes exemptions
c) Interest-free sales tax loans
d) Power tariff concession etc
 Cash subsidies will be equivalent to fixed capital
investment in addition to 15% cash subsidiary from
central government

13.  Sales tax exemption is given to small scale industries
 Sales tax exemption on purchase of machineries, raw
materials, process materials etc.
 For example Gujarat government has set up following
criteria-
a) Start the production on or after 11th November, 1977
b) Expansion , diversification or modernization of any industry

14.  14 industries are exempted like flour mill, rice mill,
laundry, tailoring, photographing studio, preparing
farsan, khakra, papad etc.
 Units run by government are exempted from the
subsidies

15.  External economics are those which accrue to firms
as a result of the expansion and concentration
Availability of RM, tools, machi. & Transportation
cost

16.  Natural factors
 Infrastructures
 Historical accidents

17.  On power purchased for 5 year
 Concession for small scale Industries
 Substantial expansion are also exempted

18.  Concessional tariff of 90% for 1st 5 year
 Not applicable for expansion or extension
 Commence taking the supply on or after 1stNov.
1978.

19.  Register a contract demand of 2500 KVA or more
 Annual operational load factor should be 80% or above
 Examine request by the Gujarat Electricity Board
 The cost of electricity should be 25% or more of the
cost of the manufacture of the particular product

20.  If capital exceeds Rs 50 lakhs then subsidy offered is
50% on project report or feasibility study otherwise
80%
Infra Structural Facilities
 State Government provides land and other basic
facilities through Industrial Development Corporations
this helps prospective entrepreneurs

21.  Most Basic requirement for any Industries
 Estates industrial sheds
 Entrepreneur to construct building takes lot of time
 Implementation of project get delayed
 Industrial Estate with readymade design
 It offered at very moderate rate of interest or easy hire-
purchase scheme

22.  Prominent factors in establishing any industrial unit
 Industrial development corporation supported by state
government and central government assist for
availability of these factors
 Sources of water supply and power
 Water supply and power are challenges before
industries. Checking water pollution and encouraging
use of renewable energy are possible solutions

23. Presented By
Mrudula Gawde
 Chaitali Patil
Kunal Ghosh
 M Farhan Chaudhary
 Ramprakash Gupta
 Hrishikesh Chumble
 Bowsmika Vadlakonda
 Milind Naik
 Ram Panchal
Rohit Wadge
 Abhinav Dubey