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AAGR in pre liberalization period to was higher in all selected parameters than that of post liberalization period to They concluded that MSMEs failed to put up an impressive performance in post reform era. The author argues that employment generation by the SSIs may be high in quantitative term but very low in quality. Technological upgradation would enable the small firms to create quality employment improving remuneration, duration and skill.
This structural shift may reduce the rate of employment generation in the short run but would ensure high-income employment generation in the long run. Subrahmanya Bala has probed the impact of globalization on the exports potentials of the small enterprises.
The study shows that share of SSI export in total export has increased in protection period but remain more or less stagnated during the liberalization period. However, the correlation co- efficient in liberalization period is higher than that of protection period suggesting that the relationship between the total export and SSI export has become stronger in liberalization period. This may be due to the drastic change in composition of SSI export items from traditional to non-traditional and growth in its contribution to total export through trading houses, export houses and subcontracting relation with large enterprises.
Micro and Small Enterprises in India: The Era of Reforms [Keshab Das] on www.farmersmarketmusic.com *FREE* shipping on qualifying offers. This book presents a set of. Indian Micro and Small Enterprises in a Changing Policy Environment; 2. Dynamic Business Environments: What These Mean for Indian Small Enterprises .
Thus, the current policy of increasing competitiveness through infusion of improved technology, finance, and marketing techniques should be emphasized. To examine the performance of Small Scale Industries SSI in India as a whole as well as in the state level, making a distinction between the pre and post reform globalization period in terms of number of units, employment, production and export.
To get a result of the performance of SSI sector in India zone wise. However the biggest challenge for the SSI units was to secure and retain markets for their products. This was made more difficult by the growing urbanization and modernization of the country and the accompanying change in taste and preferences which the bigger manufacturing houses found easy to respond.
A liberal procedure was offered for investment up to Rs. Subsequently when the Janata Government came into power in , the New Industrial Policy, was announced. In this policy, the small-sector was classified into three groups-cottage and household sector, tiny sector and smallscale industries. The Policy expanded the list of items from to items. It also recommended revamping the Khadi and Village Industries Commission and also for widespread application of suitable technology for small-scale and village industries.
The Policy also proposed to develop small machines and devices to enhance the productivity of the workers in small-scale industries. The government decided to help the small, village and cottage industries by making it mandatory for the government departments and public sector undertakings to purchase some items from these industries. The Policy took serious note of the state of affairs that emphasized on the growth of large industries neglecting cottage industries completely.
An annual review of reserved industries was to be undertaken in order to ensure that reservation accorded to the small sector was efficient and products capable of being manufactured in the small-scale were identified [ 8 ]. Industrial Policy, was designed considering IPR, as its basis. In view of the price escalation, it redefined the concept of small-scale unit increasing the investment limits in terms of plant and machinery for i the tiny unit, from Rs. This step was expected to eliminate the tendency to circumvent the present limit by under estimating the value of machinery and equipment, falsification of accounts or resort to benami units.
This enhancement of the limit was expected to help the genuine small-scale units set up by qualified entrepreneurs. This measure was expected to facilitate the long overdue modernization of the existing small-scale units. The Policy also provided some facilities like financial support to small-units, buffer stocks of critical inputs for small units, marketing support and reservation of items for small-scale industries. Despite the reforms induced by the New Industrial Licensing Policy, and Industrial Policy, the SSI were still in the stranglehold of bureaucratic rigidity , excessive regulations and control and a complex web of modalities for establishment which made life difficult for existing enterprise while at the same time severely inhibited aspiring entrepreneur from entering the industry.
With the changing market dynamics, the limit set in the size of operation was also proving to be a constraint which required immediate revision.
One of the biggest obstacles to growth and sustainability of entrepreneurship was the inadequacy of credit. The inability of the SSI units to access the capital market for funds was acting as a huge deterrent to their growth aspirations which required an immediate resolution.
In fact there was a growing need for formally devising a preferential credit policy especially for the SSI units as most banks exhibited a brazen bias for urban large scale industries in extension of credit. A major paradigm shift in the new policy was to recommend the dissolution of public sector enterprises that were chronically loss making and unviable. Besides it recommended disinvestments in those units with very low rate of return or losses.
The new industrial policy served as a turning point for the Indian economy and enabled the Central Government had to take a series of initiatives in the areas of industrial licensing, foreign investment and technology, public sector, MRTP limit etc. This facilitated the restructuring of the economy and revival the industrial sector in the country. The announcement of the New Small-Sector Industrial Policy in August, entitled Policy Measures for Promoting and Strengthening Small, Tiny and Village Enterprises was a major policy initiative in view of the process of economic reforms initiated in Indian economy in The objective of the Policy was to inject more vitality and growth impetus to the SSI sector so that it can contribute to the economy in terms of output, employment and exports.
Substantial de-licensing was made in the Policy. The investment limit in fixed capital asset for tiny enterprises was raised to Rs. To have access to capital market and to encourage modernization and technological up gradation, equity participation up to 24 percent including foreign company was allowed. Proposed limited partnership organization of this policy was expected to attract equity investment in SSI sector. Establishment of a special monitoring agency to oversee the genuine credit needs of the SSI sector was also proposed.
The Policy also made provisions for encouraging and increasing market share of the SSI sector through cooperatives, public institutions and other specialized professional or marketing agencies and consortium approach. The Policy also emphasized on the adequacy and equitable distribution of indigenous and imported raw materials for the sector. Acting on the policy report the government adopted some policy decisions for the promotion of the sector.
An ordinance was promulgated on 23 rd September making payments of interest obligatory on delayed payments to small-scale and ancillary industrial undertakings. However, this Policy left a huge lacuna in the fact that it has not given due importance to the widespread phenomenon of industrial sickness nor recommended any effective measures for it prevention.
Another significant development in the sphere of SSI sector was the setting up of the Nayak Committee by the Central Government to examine the problems of credit, sickness and some other issues. The Committee submitted its report in September A special package of measures to ensure and timely credit to the SSI sector was announced by the Reserve Bank of India in July, which assigned preferential treatment by the commercial banks to the village and tiny industries meeting the credit requirements of the SSI sector. The package also contained the steps for credit flow to the sector to meet the legitimate requirements including adoption of the Single Window Clearance Scheme of the SIDBI.
The Policy had also the provisions for technology upgradation, export development, equity support to small-scale industries. After announcing this package in , a new scheme of Integrated Infrastructure Development was introduced to develop the infrastructure facilities in 50 centers in rural and backward areas; the concessional rate of excise duty available for units with a turnover of Rs.
A quality Certification Scheme was launched in to improve the quality standards of SSI products [ 7 ]. In the post-reform period, various steps have been taken so that the tiny industries and the small-scale industries can acquire necessary strengths to face global competition though technology upgradation and modernization. Although some improvements have been witnessed in different areas, the overall growth scenario has not been satisfactory.
A study group on development of small enterprises called Gupta Study Group was constituted in May, which submitted its report in The Group recommended a three-tier definition of tiny, small and medium enterprises. It defined a tiny unit with investment in plant and machinery up to Rs. However in case of modern enterprises, the investment limit in fixed assets was recommended to be from Rs.