Incentives:
The incentives offered by the government to develop backward areas are:
1. Availability of land at concessional rate.
2. Supply power at a concessional rate of 50% or exempt such units from payment in the initial years.
3. Water is supplied on a no-profit, noloss basis or with 50 percent concession or exemption from water charges for a period of 5 years.
4. All union territories, industries are exempted from sales tax,
5. Most states have abolished octroi.
6. Units located in backward areas get scarce raw materials at concessional rates.
7. Subsidy of 10-15% for building capital asset. Loans are offered at concessional rates.
8. Some states encourage setting up of industrial estates in backward areas.
9. Exemption from paying taxes for 5 or 10 years is given to industries established in backward, hilly and tribal areas.
