Managerial Economics<br />
<ul><li>Transport Cost
Power subsidy
Government strategies
External economies
Electricity duty exemption
Concession to new industry
Concessional tariffs
Power intensive Industry
Incentives for project report
Water supply & Power</li></ul>Factors Affecting Location of the Firm<br />
<ul><li>Raw material oriented Industries will be closed to sources of supply</li></ul>	For e.g. Tata Steel<br /><ul><li>De...
Market<br /><ul><li>Industries tends to be near their market
 Industries of perishable products
 Size of market is measured by its potential sales</li></li></ul><li>Energy<br /><ul><li>Source of energy</li></ul>Coal Fi...
<ul><li>Plays very important role.
Some industries require dry, some require humid.
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  1. 1. Managerial Economics<br />
  2. 2. <ul><li>Transport Cost
  3. 3. Market
  4. 4. Energy
  5. 5. Labour
  6. 6. Climate
  7. 7. Power subsidy
  8. 8. Government strategies
  9. 9. Area
  10. 10. External economies
  11. 11. Electricity duty exemption
  12. 12. Concession to new industry
  13. 13. Concessional tariffs
  14. 14. Power intensive Industry
  15. 15. Incentives for project report
  16. 16. Land
  17. 17. Water supply & Power</li></ul>Factors Affecting Location of the Firm<br />
  18. 18. <ul><li>Raw material oriented Industries will be closed to sources of supply</li></ul> For e.g. Tata Steel<br /><ul><li>Depends upon type of raw material</li></ul>Perishable<br /> For e.g. Fruit Canning industries<br />Non perishable<br /> For e.g. Pharmaceutical Industries<br />Transport Cost<br />
  19. 19. Market<br /><ul><li>Industries tends to be near their market
  20. 20. Industries of perishable products
  21. 21. Size of market is measured by its potential sales</li></li></ul><li>Energy<br /><ul><li>Source of energy</li></ul>Coal Fields<br />Rivers<br /><ul><li>Advancement in technology</li></li></ul><li>Labour<br /><ul><li> Most important factor of production which </li></ul> influence the location of an industry<br /><ul><li> Capital-intensive industries and Labour-intensive</li></ul> Industries<br /><ul><li> Three types of labour – Skilled, Semi-skilled and</li></ul>Unskilled<br />
  22. 22. <ul><li>Plays very important role.
  23. 23. Some industries require dry, some require humid.
  24. 24. Cotton requires humid conditions.
  25. 25. Textile industries require moist climate.</li></ul>Climate<br />
  26. 26. <ul><li>Granted to small scale units on power consumption
  27. 27. The quantum admissible is difference between the actual rate per unit and</li></ul>3 paise/unit to max. 12 paise/unit if population is upto 20,000<br />6paise/unit to max. 9 paise/unit if population is 20,000 to 1,00,000<br />9paise/unit to max. 16 paise/unit if population is above 1,00,000<br />Power Subsidy<br />
  28. 28. Government Strategy<br /><ul><li> Earlier conditions: Industries were set up as per the</li></ul> wish of entrepreneurs<br /><ul><li> Results: congestion of industries, migration of labor,</li></ul> Problems of housing ,soaring prices , awkward growth<br /> and regional imbalance etc<br />
  29. 29. <ul><li>Steps taken State Industrial Development corporation
  30. 30. Identify backward industrial areas
  31. 31. Offer a package of incentives
  32. 32. Give notifications bout such incentives</li></ul>Government Strategy<br />
  33. 33. Areas<br /><ul><li>Divided area into –</li></ul>Well Developed<br />Nearly developing<br />Developing <br />Underdeveloped <br />Undeveloped<br /><ul><li> General type of incentives to industries
  34. 34. Especial incentives or concession given in addition</li></li></ul><li>Areas<br /><ul><li> Special incentives :</li></ul>Cash subsidies<br />Sales taxes exemptions<br />Interest-free sales tax loans <br />Power tariff concession etc<br /><ul><li>Cash subsidies will be equivalent to fixed capital investment in addition to 15% cash subsidiary from central government</li></li></ul><li>Sales Tax Exemption<br /><ul><li>Sales tax exemption is given to small scale industries
  35. 35. Sales tax exemption on purchase of machineries, raw materials, process materials etc.
  36. 36. For example Gujarat government has set up following criteria-</li></ul>Start the production on or after 11th November, 1977<br />Expansion , diversification or modernization of any industry<br />
  37. 37. Sales Tax Exemption<br /><ul><li>14 industries are exempted like flour mill, rice mill, laundry, tailoring, photographing studio, preparing farsan, khakra, papad etc.
  38. 38. Units run by government are exempted from the subsidies</li></li></ul><li>External Economics<br /><ul><li>External economics are those which accrue to firms as a result of the expansion and concentration
  39. 39. Availability of RM, tools, machi. & Transportation cost</li></li></ul><li>Other Factors<br /><ul><li>Natural factors
  40. 40. Infrastructures
  41. 41. Historical accidents</li></li></ul><li>Electricity Duty Exemption<br /><ul><li> On power purchased for 5 year
  42. 42. Concession for small scale Industries
  43. 43. Substantial expansion are also exempted</li></li></ul><li>Concession To New Industries<br /><ul><li>Concessional tariff of 90% for 1st 5 year
  44. 44. Not applicable for expansion or extension
  45. 45. Commence taking the supply on or after 1stNov. 1978.</li></li></ul><li><ul><li>Register a contract demand of 2500 KVA or more
  46. 46. Annual operational load factor should be 80% or above
  47. 47. Examine request by the Gujarat Electricity Board
  48. 48. The cost of electricity should be 25% or more of the cost of the manufacture of the particular product</li></ul>Power Intensive Industry<br />
  49. 49. <ul><li>If capital exceeds Rs 50 lakhs then subsidy offered is 50% on project report or feasibility study otherwise 80%</li></ul>Infra Structural Facilities<br /><ul><li>State Government provides land and other basic facilities through Industrial Development Corporations this helps prospective entrepreneurs</li></ul>Financial Incentives<br />
  50. 50. <ul><li>Most Basic requirement for any Industries
  51. 51. Estates industrial sheds
  52. 52. Entrepreneur to construct building takes lot of time
  53. 53. Implementation of project get delayed
  54. 54. Industrial Estate with readymade design
  55. 55. It offered at very moderate rate of interest or easy hire-purchase scheme </li></ul>Land<br />
  56. 56. Water Suppy And Power<br /><ul><li>Prominent factors in establishing any industrial unit
  57. 57. Industrial development corporation supported by state government and central government assist for availability of these factors
  58. 58. Sources of water supply and power
  59. 59. Water supply and power are challenges before industries. Checking water pollution and encouraging use of renewable energy are possible solutions</li></li></ul><li>Thank You<br />Presented By<br /><ul><li>ChaitaliPatil
  60. 60. M FarhanChaudhary
  61. 61. HrishikeshChumble
  62. 62. MilindNaik
  63. 63. RohitWadge
  64. 64. MrudulaGawde
  65. 65. KunalGhosh
  66. 66. Ramprakash Gupta
  67. 67. BowsmikaVadlakonda
  68. 68. Ram Panchal
  69. 69. AbhinavDubey</li>
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