IDEAS home Printed from https://ideas.repec.org/a/dse/indecr/v32y1997i1p39-64.html
   My bibliography  Save this article

Policy on Modern Small Scale Industries: A Case of Government Failure

Author

Listed:
  • Suresh D. Tendulkar

    (Delhi School of Economics)

  • T. A. Bhavani

    (Institute of Economic Growth)

Abstract

In this paper, we address ourselves to an evaluation of government policy designed for the modern segment of the small scale manufacturing sector. We argue that the policy has been and continues to be supply-driven and paternalistic leading to dependency. In addition, the individual unit-centered atomistic approach of policy is dominated by continuous protective and discretionary promotional measures with perverse incentive effects for the healthy growth of this segment. We underline the need to move away from continued protection and bureaucratic discretion-based promotion and argue for a radical shift in this policy towards a demand-driven, group-oriented and collective effort-based (rather than atomistic) approach. We argue 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. It would induce this segment to get out of the syndrome of remaining small and inefficient. The suggested shift in policy is necessary in order to flexibly adjust to fast changing circumstances so as to better serve the longstanding and as yet unattained objective of developing a vibrant and self-reliant modern small scale industry.

Suggested Citation

  • Suresh D. Tendulkar & T. A. Bhavani, 1997. "Policy on Modern Small Scale Industries: A Case of Government Failure," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 32(1), pages 39-64, January.
    • Handle: RePEc:dse:indecr:v:32:y:1997:i:1:p:39-64
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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.
    3. 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).
    4. Pradhan, Jaya Prakash & Husain, Tareef, 2021. "Drivers of SME Formation in Indian States: The Empirics," MPRA Paper 25061, University Library of Munich, Germany.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    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.

    More about this item

    JEL classification:

    • H19 - Public Economics - - Structure and Scope of Government - - - Other
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • P41 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Planning, Coordination, and Reform

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dse:indecr:v:32:y:1997:i:1:p:39-64. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Pami Dua (email available below). General contact details of provider: https://edirc.repec.org/data/deudein.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.