SSIs have been given preferential treatment through the provision of lower interest rates as well as requirement for a minimum credit allocation from the commercial banks. Since 1986, fiscal incentives have also been provided to the SSI units in terms of complete exemption from excise duties or payment of lower rates, under specified conditions.
Since April 1995, SSI units are allowed a deduction of 25 per cent of the profits for a period of ten years, for taxation purpose. In case the SSI units set up in specified backward area, full tax exemption is allowed for the first five years and a deduction of 25 per cent in the subsequent five years.