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Chapters- 1 - 2 - 3 - 4 - 5 - 6 - 7

CHAPTER - 1

Initiatives taken for Pollution Prevention

5.0 Initiatives taken for Pollution Prevention
5.1 Fiscal incentives for pollution control
5.1.1 Water Cess Act 1977
5.1.2 Effluent Charges
5.1.3 Credit and Loan at reduced rate of interest
5.1.4 Customs or Excise Duties and Sales Tax Rebate
5.1.5 Depreciation Allowance
5.1.6 Investment allowance
5.1.7 Tax Benefits through contributions towards natural resource conservation
5.1.8 Exemption From Tax On Capital
5.2 Strengthening Of Emission Standards
5.3 Ecolabelling
5.4 Scheme for adoption of Cleaner Technologies in Small Scale Industries


5.0 Initiatives taken for Pollution Prevention
Coupled with the shift in policy with more emphasis on prevention of pollution, the government has also introduced a number of schemes which will motivate the entrepreneurs to take up steps to curb pollution. A review of the schemes which have so far been introduced in India for pollution abatement is given here.

5.1 Fiscal incentives for pollution control
The economic incentives which have been introduced include :

5.1.1 Water Cess Act 1977
The act provides for a 25% rebate on the cess payable if the person or local authority concerned installs a plant for treatment of sewage or trade effluent. It is instrument for pollution abatement.

5.1.2 Effluent Charges

Effluent charges based on nature and volume of effluents released are being considered. The scope of charges will be extended to air emissions and solid wastes. These charges may generate initiatives towards optional releases and encourage new / advanced technology adaptations in the production processes.

5.1.3 Credit and Loan at reduced rate of interest

The World Bank assisted Industrial Pollution Prevention Project is targeted at introducing Cleaner Technologies in industrial units. Under the investment component of the Project, the World Bank line of credit is available to industrial units for undertaking appropriate measures for Pollution abatement, with a focus on Waste Minimisation and adoption of Cleaner Production methodologies.

5.1.4 Customs or Excise Duties and Sales Tax Rebate

The customs duty on some specified pollution control equipment has been reduced to a concessional rate of 35%. The countervailing duty has also been eliminated for such items and auxiliary duty has been reduced to 5%. Since March 1992, a rebate of over 5% has been allowed on excise duty of over 5%. In addition to the rebate on customs and excise duties levied by the Central Government, certain states too have offered concessions on Sales Tax for specified pollution control equipment

5.1.5 Depreciation Allowance

There is provision for allowing the deduction of a certain percentage of written down actual cost of capital assets, net of any subsidies and concessions from gross profit in computing the base for levy of corporate tax. A notification issued in February, 1983 introduced for the first time a higher rate of depreciation for pollution control equipment as compared to 25% applicable for the general plant and machinery. This 30% was gradually increased to 100% in 1993-94 budget.

5.1.6 Investment allowance

A provision is available in the Income Tax Act under which a companv can deduct upto 25% of the actual cost of some specified new assets for computation of taxable profit. This allowance was raised to 35% for pollution control equipment.

5.1.7 Tax Benefits through contributions towards natural resource conservation

A provision has been made in the income Tax Act which allows deduction of contribution made by tax payers to any institution engaged in the conservation of natural resources while computing taxable income.

5.1.8 Exemption From Tax On Capital

The Income Tax act also provides for exemption of capital gains arising from transfer of building, land, machinery etc., for establishing business in a new place to reduce industrial congestion.

5.2 Strengthening Of Emission Standards

In order to promote resource conservation by industry, rules related to standards for consumption of water by polluting industries (example Chemicals , Pulp and Paper, Fertilizers, Tanneries, Sugar and Distilleries and Metallurgical industries) have been notified. To promote the shift from pollution control to pollution prevention regime, rules related to load based standards instead of concentration based standards have been notified for a limited number of industries viz. Refineries, Smelters, manufacturing of Inorganic Acids, Coke ovens, Aluminium Plants, Glass manufacture and some synthetic fibers.

5.3 Ecolabelling

Eco-labelling scheme by Government of India supports Cleaner Production Policies as there is a strong emphasis on Cleaner manufacturing process for grant of eco-labels.

5.4 Scheme for adoption of Cleaner Technologies in Small Scale Industries

The main aim of the scheme is to promote the development and adoption of Clean technologies and best practices and techniques including waste reuse and recycling for SSI's to realise economic and environmental benefits. The scheme provides financial assistance for undertaking Waste Minimisation assessments and Demonstration projects in selected sectors, preparation of sector specific manuals on Waste Minimisation / Demonstration projects undertaken, creation of data base on the availability of clean technology or present status of clean technologies used in the industries, identification and diffusion of clean technology to the industry and conducting training and awareness programme among small scale industries regarding pollution prevention and cleaner production

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