Dadra & Nagar Haveli is a predominantly a backward area in both the way economically as well industrially. It has an area of 491 sq.kms. and surrounded by State of Gujarat and Maharashtra , which are having a very healthy position, economical and industrial. Further the U.T. is located at almost equal distance from Mumbai, an Business/Economic capital of the country and Surat a Business/economic capital of Gujarat State . West sea coast is just 30 kms. Away and nearest railway station is Vapi on Western railway which is 15 kms. from Silvassa, the Head Quarter of Dadra & Nagar Haveli. Thus U.T. has a locational advantage. U.T. has very thin/less population but 88% of them are adivasis/backward who do not possess industrial skill and discipline and as a result has a problem of unemployment.
After liberation from Portuguese regime in 1954 and merger with the Union of India in 1962 the Administrator has started taking effective steps for the up liftment of the area. The industrial development has started on a very low key bases during the year 1965 by establishing a industrial estate under co-operative sector namely Dan Udyog Sahakari Sangh Ltd., which was having nearly 130 plots. Since this is Union Territory without legislature there was no Sales Tax and it was a huge benefit, attraction for the entrepreneurs. Since the Administration was having an environment friendly attitude not allowed any polluting Unit and lacking in industrial infrastructure. Even though the industrial pace was good and upto 1970, good number of Units has been established in the territory, say 30 Units, namely Engineering, Fabrics weaving Units and a dyeing and printing Unit, providing good employment to local tribes.
In 1971, Government of India has declared U.T. as industrially backward area/district and extended the Scheme of 10% cash subsidy to the industrial units on their capital investment. The quantum of subsidy was increased gradually to 15% and 25% subsequently which resulted in speedy industrial development of the territory. This Scheme was closed/terminated from 30th September 1988 and during this period the Government has disbursed subsidy to the tune of Rs.12,33,66,142/- say Rs. 12.5 crores to the Units established.
Meanwhile from January 1984 the Sales Tax Act was implemented and the Industrial Units who so ever establishes were eligible for sales tax exemption for the period of 15 years. This Scheme was in force upto 1998. At present the new established Units are getting the benefit of Central Sales Tax exemption which is available upto the year 2017.
Further the territory has establish a very good net work of electricity which is being made available from Central grid and hence the electricity which is a main source of energy for the industry was very cheap compared to the adjoining area and being a comparatively small area network easy maintenance results is very less interruption say no interruption. The territory has one 220 KVA Sub station and a network of 66 KVA all over the territory. Hence the industry in any corner of the territory gets the power without delay. Due to availability of power from central grid and less maintenance cost the ultimate power tariff is very less in comparison to adjoining states and other areas. The rate is at present Rs.2.75 per Unit. This has attracted many industries which has continuous process or required uninterrupted power.
Since 1st April 1993, 100% deduction is available to the Industrial establishments in their profit and gains, for the 1st five years and the same was available up to March 2002. This implies that those Units which begin to manufacture or produce articles on or before 30th March 2002 were entitled for 100% income tax holiday for the 1st five assessment years.
Also after the initial five years benefit such industrial undertaking are entitled to the deduction at the rate of 25% for their profits and gains for the next five assessment years.
Over and above these facilities the Government/Administration has developed three Industrial Estates at villages Masat, Silvassa Phase-I, Silvassa Phase II at Amli and Khadoli, having total 290 plots admeasuring 700 sq.mtrs. to 4000 sq.mtrs. with good road network. Two Co-Operative Industrial Estates are also functioning in Amli village with necessary infrastructure. Over and above the Administration is considering the applications of individuals for converting the Agriculture land into non Agriculture. Till date Administration has considered N.A. for 1700 hectares of land and still 1300 hectares is available under Regional Plan 2000-2020 for Dadra and Nagar Haveli.
The Value Added Tax has been enforce since 1st April 2005, but the tax benefits/exemption available to the Industrial Units has been made available to them for the balance period.