Industrial Dispersal Through Sales Tax Incentives: An Inter-Regional Picture of Maharashtra upto 1995

Abstract

This paper aims at analysing the inter-regional distribution of sales tax exemption and deferral benefits granted to industrialists in Maharashtra during 1979-1995. The incentives have been offered as a strategy dispersal of industrial units into the less developed and undeveloped regions of the state. Sales tax incentives as a supplementary measure for dispersal has been in vogue in Maharashtra since 1964, when a package scheme of incentives was introduced to help industrialization of the state in general and the backward regions in particular. (See Srinivasan, 1967 that sales tax incentives were transformed into a major dispersal tool when several modifications were effected in their structure and the modus operandi (GOM, 1980, GOM, 1982). The sales tax incentives emereged as an important govenment strategy for industrial development becomes very evident when we find that the total amoutn of sales tax benefits santioned in the state across regions between 1979 and March 1995 amounted...