7327 availability of capital another important factor

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7.3.2.7 Availability of Capital Another important factor deciding the choice of location is the availability of capital. Fixed capital is required for the construction of building and acquisition of land. But on the other hand buildings can also be rented and existing plants can be expanded. The availability of such factors is also affecting the decision on site selection.A careful study on financial strength and weaknesses of the proposed project should be undertaken.
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85 7.3.2.8 Policies of the Government The policies of the Central, state governments and local bodies concerning labour laws, building codes, safety, tax, etc. are the major factors which affect the choice location for the industries. Government provides various kinds of incentives to entrepreneurs for industrial development in special economic zone. The incentive package may be in the form of exemption from a sales tax and excise duties for a specific period, soft loan from financial institutions and investment subsidy. Some of these incentives may tempt to locate the plant to avail these facilities offered. 7.3.2.9 Climatic Conditions The natural condition of the geographical area needs to be considered together with climatic conditions. Climates greatly influence human efficiency and behaviour and reflect the same in the labour productivity. Some industries require specific climatic conditions e.g., textile mill requires humidity. Therefore such special climatic factors have to be carefully examined in the choice of project site. 7.3.2.10 Supporting Industries and Services Availability of supporting industries is another consideration which affects the choice of location. Manufacturing organisation will not make all the components and parts by itself. Sometimes it subcontracts the work to vendors to manufacture. So,the source of supply of component parts will be the one of the factors that influences the location. The presence of healthy relationship among different firms is also a pre-requisite for industries to develop. The various services like communications, banking services, professional consultancy services will play a vital role in selection of a location. 7.3.2.11 Community and Labour Attitudes The general attitude of the community towards proposed industry will have an important bearing in the choice location. Sometimes, a specific location is not desirable because of labours negative attitude towards management, which brings very often the strikes and lockouts. Such conditions have to be seriously analysed. 7.3.2.12 Availability of Community Infrastructure All manufacturing activities require access to a transport infrastructure such as roads, railways, port, power lines and other service facilities .The availability of social facilities like schools, universities and hospitals are also the major determinants in the choice project site. These factors are also required to be considered by managers.
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