Capitalism in India and the Small Industries Policy

It is instructive to look at the genesis of what has come to be known as the small industries development policy and to see whether it was at all possible in the early 1950s, given the already existing strength of large industry, for any government to have appreciably increased the strength of cottage and other small industry — and thus to have provided the jobs which, it is claimed, the policy actually implemented did not. For this purpose, we must examine the Congress's original views on the pattern of development it wished to see; the results of almost 20 years of debate following the 1929 Karachi resolution; and the opposition these views faced once Independence was a reality — both from large industrialists and from large landholders. Attempts were made by the large industrialists to bring about direct changes in policy, while the large landholders tried to preserve their economic and social interests through intervention largely at the more detailed policy-making stage and at the time of implementation. Though both types of obstruction had an impact on the final shape of the small industries policy, it is with the former that this paper is principally concerned.