The Growth and Transformation of Small Firms in India

The Growth and Transformation of Small Firms in India

Product ID: 7112

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Author: Sebastian Morris
Rakesh Basant/Keshab Das
: Sebastian Morris, Rakesh Basant and Keshab Das
Publisher: Oxford University Press
Year: 2001
Language: English
Pages: 376
ISBN/UPC (if available): 0195651197


The volume assesses the performance of the small-scale sector in India especially in response to the introduction of economic reforms. It evaluates the consistency and relevance of various policies in this context, including:

2.Excise duty concessions
3.Infrastructural Support
4.Credit Availability

The study finds that macroeconomic policy, especially with regards to trade and exchange rate and the functioning of credit markets, has severely discriminated against small firms. Bringing in a wide variety of evidence, including that from a large primary survey, the study recommends:

1. More aggressive exchange rate policy
2. Correction of the tariff inversion
3. Incentivization of credit flows, and
4. De-reservation.

This would make the sector the principal dynamic force in the economy. Small firms need to be freed rather than protected. The deep schism in the labor market makes small firms crucial to the transformation of the economy and to labor absorption.

The author goes beyond the current paradigm of protective small industry policy and make recommendations both for the development of the sector as well as growth and the transformation of the economy. The characterization the segments within the small firms sector is new and innovative and leads to a new perspective of the economy and its structure.

This book will be of interest to students of industrial economics and management, and policy-maker with a serious interest in the small-scale sector.