Short Essay on the Favourable Factors in Private Enterprise in India

Thirdly, the Indian market is completely sheltered since the policy of developing indigenous resources led to almost total banning of such imports as might compete with the products of local industry.

This is a further reason why the private enterprise has been able to make good profits even when some of their products were substandard.

Fourthly, the various feasibility studies and demand projection estimates made by the public sector institutions enabled the potential entrepreneurs to know the prospects of investment in those fields.

Fifthly, various institutions have been set up to see that industries are not starved of legitimate financial needs. The development banks like IFC, ICICI, IDBI, SFC etc. provide industries with financial accommodation.

They help industries in the form of long-term loans, underwriting of shares and debentures and participating in equity. A study of the balance sheets of a large number of companies indicates that finance provided by such institutions enabled them to grow and prosper.

Lastly, the private enterprise received some direct incentives from the Government. Despite the heavy doses of taxation, many of the Finance Acts contained various tax concessions such as tax holidays for new undertakings, developmental rebate, abolition of bonus tax etc. Income Tax Act also provides fiscal incentives to the individual and corporate sectors.