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Policy On Modem Small Scale Industries: A Case Of Government Failure

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  • Suresh D. Tendulkar

    (Delhi School of Economics)

  • T. A. Bhavani

    (Delhi School of Economics)

Abstract

In this paper. We address ourselves to an evaluation of government policy designed for the modern small scale industrial segment of the small scale sector. We argue that the policy has been and continues to be supply-driven in being paternalistic and atomistic in the sense of individual unit-centred and is dominated by continuous protective and discretionary prol1jlOtional measures with adverse side-effects for the healthy growth of this segment. We underline the need to move away from perpetual protection and bureaucratic discretion-based promotion and argue for a radical shift in this policy towards a demand-driven and group Oriented and collective effort-based (rather ,than atomistic) approach with a plea for the abolition of indiscriminate reservation of production lines for exclusive production in the small scale sector and introducing and strictly enforcing the time bound character of promotional concessions to get out of the syndrome of remaining small and inefficient. The suggested shift in policy is necessary in order to flexibly adjust to changing circumstances so as to better serve the long-standing and as yet unattained objective of developing a vibrant and self-reliant modem small scale industry.

Suggested Citation

  • Suresh D. Tendulkar & T. A. Bhavani, 1997. "Policy On Modem Small Scale Industries: A Case Of Government Failure," Working papers 44, Centre for Development Economics, Delhi School of Economics.
    • Handle: RePEc:cde:cdewps:44
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    References listed on IDEAS

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    1. Prendergast, Renee, 1990. "Causes of multiproduct production: The case of the engineering industries in developing countries," World Development, Elsevier, vol. 18(3), pages 361-370, March.
    2. Hicks, J. R., 1969. "A Theory of Economic History," OUP Catalogue, Oxford University Press, number 9780198811633, Decembrie.
    3. Kaushik Basu & Arghya Ghosh & Tridip Ray Author-Workplace-Delhi School of Economics, 1994. "The Babu And The Boxwallah Managerial Incentives And Government Intervention," Working papers 01, Centre for Development Economics, Delhi School of Economics.
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    Cited by:

    1. Badola, Shivani & Mukherjee, Sacchidananda, 2020. "Factors Influencing Access to Formal Credit of Unincorporated Enterprises in India: Analysis of NSSO's Unit-level Data," Working Papers 20/326, National Institute of Public Finance and Policy.
    2. Bhavani, T.A. & Bhanumurthy, N.R., 2014. "Financial Access - Measurement and Determinants: A Case Study of Unorganised Manufacturing Enterprises in India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 49(1), pages 85-108.
    3. Nezih Guner & Gustavo Ventura & Xu Yi, 2008. "Macroeconomic Implications of Size-Dependent Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 721-744, October.
    4. Bagchi, Amaresh & Rao, R. Kavita & Sen, Bulbul, 2005. "Tax breaks for the small scale sector: An appraisal," Working Papers tru3, National Institute of Public Finance and Policy.
    5. T. A. Bhavani, 2002. "Impact of Technology on the Competitiveness of the Indian Small Manufacturing Sector: A Case Study of the Automotive Component Industry," WIDER Working Paper Series DP2002-76, World Institute for Development Economic Research (UNU-WIDER).
    6. T.A. Bhavani & Suresh D. Tendulkar, 1998. "Determinants Of Firm-Level Export Performance: A Case Study Indian Textile Garments And Apparel Industry," Working papers 58, Centre for Development Economics, Delhi School of Economics.
    7. T. A. Bhavani & Suresh Tendulkar, 2001. "Determinants of firm-level export performance: a case study of Indian textile garments and apparel industry," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(1), pages 65-92.
    8. Pradhan, Jaya Prakash & Husain, Tareef, 2021. "Drivers of SME Formation in Indian States: The Empirics," MPRA Paper 25061, University Library of Munich, Germany.
    9. Richard Harrison & William Scheela & P. C. Lai & Sivapalan Vivekarajah, 2018. "Beyond institutional voids and the middle-income trap: The emerging business angel market in Malaysia," Asia Pacific Journal of Management, Springer, vol. 35(4), pages 965-991, December.
    10. T.A. Bhavani & Suresh D. Tendulkar, 2010. "Determinants of Firm-level Export Performance: A Case Study of Indian Textile Garments and Apparel Industry," Working Papers id:2964, eSocialSciences.
    11. Kausik Chaudhuri & Subash Sasidharan & Rajesh Seethamma Natarajan Raj, 2020. "Gender, small firm ownership, and credit access: some insights from India," Small Business Economics, Springer, vol. 54(4), pages 1165-1181, April.
    12. T.A Bhavani & Suresh D. Tendulkar, 2000. "Determinants of Firm-level Export Performance: A Case Study of Indian Textile Garments and Apparel Industry," Working papers 81, Centre for Development Economics, Delhi School of Economics.

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