UPSC Prelims 2001 Q80: Indian Economy – Fiscal Policy & Budget
The Union Budget, 2000 awarded a Tax Holiday for the North - eastern Region to promote
industrialisation for
- (a) 5 years
- (b) 7 years
- (c) 9 years
- (d) 10 years
Answer: (d) 10 years
Explanation
Length of the tax holiday for the North-eastern Region in the Union Budget 2000
| Fact | Detail |
|---|---|
| Budget | Union Budget 2000-01, presented by Yashwant Sinha |
| Tax holiday | 10 years of income tax exemption for new industrial units in the North-East |
| Linked policy | North East Industrial Policy, 1997 and Section 80-IC / 10C of the Income-tax Act |
| Aim | Draw private investment into a region with little industry |
The Union Budget 2000 gave a 10-year tax holiday to industries in the North-eastern Region, extending the benefits under the 1997 North East Industrial Policy.
Answer: (d) 10 years.
Why each option is right or wrong
- (a) Incorrect. The holiday was longer than 5 years.
- (b) Incorrect. The holiday was longer than 7 years.
- (c) Incorrect. The holiday was 10 years, not 9.
- (d) CORRECT. The Budget 2000 gave a 10-year tax holiday.
Key point
North East Industrial and Investment Promotion Policy (NEIIPP), 2007 continued tax and subsidy incentives for the region.
Remember
Budget 2000: 10-year tax holiday for the North-East.
Common mistakes
- Choosing the common 5-year tax holiday.
- Confusing it with SEZ holidays (10 + 5 + 5 years).
- Not linking it to the 1997 North East Industrial Policy.
Exam tip
For special-region incentives of that era, 10 years was the standard holiday.
Sources
- Ministry of Finance — Union Budget 2000-01, Budget Speech (Part B)
- Income-tax Act, 1961 — Section 10C (North-Eastern Region)